Corporation Tax Bill

House of Commons

Session 2008 - 09
Internet Publications
Other Bills before Parliament

Corporation Tax Bill

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
710

      (7)
After paragraph 6(8) (contracts which become derivative contracts: contracts
within Schedule 5AA to ICTA) insert—
   “(8A)
In relation to an accounting period ending on or after 1 April
2009—
(a)
the reference in sub-paragraph (7) to paragraph 14(3) of
5
Schedule 26 is to be read as a reference to section 574 of the
Corporation Tax Act 2009,
(b)
the reference in that sub-paragraph to Chapter 2 of Part 4
of the Finance Act 1996 is to be read as a reference to Part 5
of the Corporation Tax Act 2009, and
10
(c)
the references in sub-paragraph (8) to Schedule 26 are to be
read as references to Part 7 of the Corporation Tax Act
2009.”
545
Omit Schedule 29 (gains and losses of a company from intangible fixed
assets).
15
Proceeds of Crime Act 2002 (c. 29)
546
The Proceeds of Crime Act 2002 is amended as follows.
547   (1)
Amend Schedule 10 (tax) as follows.
      (2)
In paragraph 9—
(a)
in sub-paragraph (1) for “section 84” to “that Act)” substitute “Part 5
20
of the Corporation Tax Act 2009 (loan relationships)”, and
(b)
in sub-paragraph (2) for the words “that Chapter” substitute “that
Part”.
      (3)
In paragraph 11—
(a)
in sub-paragraph (3) for the words from “section 100” to the end
25
substitute “section 173 of ITTOIA 2005 or section 162 of the
Corporation Tax Act 2009 (valuation of trading stock on cessation).”,
and
(b)
in sub-paragraph (4) for the words from “section 100” to the end
substitute “section 174 of ITTOIA 2005 or (as the case may be) section
30
163 of the Corporation Tax Act 2009.”
Income Tax (Earnings and Pensions) Act 2003 (c. 1)
548
The Income Tax (Earnings and Pensions) Act 2003 is amended as follows.
549
In section 61(1) (interpretation) in the definition of “business” for “or
Schedule A business” substitute “within the meaning of Chapter 2 of Part 3
35
of ITTOIA 2005 or Chapter 2 of Part 4 of CTA 2009”.
550
In section 178(d) (exception for loans where interest qualifies for tax relief)
for “, or a Schedule A business,” substitute “(within the meaning of Chapter
2 of Part 3 of ITTOIA 2005 or Chapter 2 of Part 4 of CTA 2009)”.
551
In section 180(5)(d) (threshold for benefit of loan to be treated as earnings)
40
for “, or a Schedule A business,” substitute “(within the meaning of Chapter
2 of Part 3 of ITTOIA 2005 or Chapter 2 of Part 4 of CTA 2009)”.
552   (1)
Amend section 357 (business entertainment and gifts: exception where
employer’s expenses disallowed) as follows.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
711

      (2)
In subsection (2) for “section 577 of ICTA” substitute “section 1298 of CTA
2009”.
      (3)
In subsection (3) for “that section” substitute “section 1298 of CTA 2009”.
553
In section 420(1)(h) (meaning of securities etc) at the end insert “or section
507 of CTA 2009 (investment bond arrangements)”.
5
554   (1)
Amend section 515 (which refers to other provisions which deal with share
incentive plans) as follows.
      (2)
Omit subsection (1).
      (3)
In subsection (2)—
(a)
omit the “and” immediately after paragraph (c), and
10
(b)
after paragraph (d) insert “, and
(e)
Chapter 1 of Part 11 of CTA 2009 (share incentive
plans)”.
555
In section 702(5B) (which sets out what shares are corporation tax
deductible) for “Schedule 23 to the Finance Act 2003” substitute “Part 12 of
15
CTA 2009”.
556
In Schedule 1 (abbreviations and defined expressions)—
(a)
in Part 1 at the end insert—

“CTA 2009
The Corporation Tax Act 2009”, and

(b)
in Part 2 omit the entries for “Schedule A business” and “UK
20
property business”.
557
In Schedule 2 (approved share incentive plans), in paragraph 85(1)(c), for
“paragraph 11 of Schedule 4AA to ICTA” substitute “section 998 of CTA
2009”.
Finance Act 2003 (c. 14)
25
558
The Finance Act 2003 is amended as follows.
559
Omit section 141 (corporation tax for employee share acquisitions).
560
Omit section 143 (restriction of deductions for employee benefit
contributions).
561
In section 148 (meaning of “permanent establishment”)—
30
(a)
in subsection (5A)—
(i)
for “as defined by Chapter 5 of Part 2 of the Finance Act 2005”
substitute “within section 47(6) or (7), 47A(5), 48B(1) or
49A(2) of the Finance Act 2005 or section 511, 512 or 513(2) or
(3) of the Corporation Tax Act 2009”, and
35
(ii)
for “the arrangements falling within that section” substitute
“the alternative finance arrangements in question”, and
(b)
omit subsection (5B).
562   (1)
Amend section 150 (non-resident companies: assessment, collection and
recovery of corporation tax) as follows.
40

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
712

      (2)
In subsection (2) for “section 11(2A) of the Taxes Act 1988” substitute
“section 19 of the Corporation Tax Act 2009”.
      (3)
In subsection (7) omit the words from “; and” to the end.
      (4)
After subsection (7) insert—
“(7A)
In this section references to carrying on a trade include holding an
5
office.”
563
In section 152(2) (non-resident companies: transactions carried out through
broker, investment manager or Lloyd’s agent) for “section 11AA of the
Taxes Act 1988” substitute “Chapter 4 of Part 2 of the Corporation Tax Act
2009”.
10
564
After section 177(4) (currency contracts and currency options) insert—
“(4A)
In relation to a subsequent accounting period ending on or after 1
April 2009, the reference in subsection (4)(c) to Schedule 26 is to be
read as a reference to Part 7 of the Corporation Tax Act 2009.”
565
In section 195(9)(b) (companies acquiring their own shares) for the words
15
from “in accordance with” to the end substitute “under Chapter 2 of Part 3
of the Corporation Tax Act 2009”.
566
Omit Schedule 23 (corporation tax relief for employee share acquisitions).
567
Omit Schedule 24 (restriction of deductions for employee benefit
contributions).
20
568
In paragraph 5A(2) of Schedule 26 (non-resident companies: transactions
through broker, investment manager or Lloyd’s agent) for “section 11AA of
the Taxes Act 1988” substitute “Chapter 4 of Part 2 of the Corporation Tax
Act 2009”.
Finance Act 2004 (c. 12)
25
569
The Finance Act 2004 is amended as follows.
570
In section 71 (collection and recovery of sums to be deducted) omit
subsection (3)(b) and the “and” immediately before it.
571
In section 83(4) (giving through the self-assessment return)—
(a)
after “section 505(1)(c)(ii)” insert “or (iiza) or, so far as relating to
30
annual payments from a source in the United Kingdom, (iizb)”, and
(b)
for “Case III of Schedule D” substitute “section 299 of the
Corporation Tax Act 2009 or Chapter 5 or 7 of Part 10 of that Act”.
572   (1)
Amend section 131 (companies in partnership) as follows.
      (2)
In subsection (4) for the words from “annual” to the end substitute “an
35
amount—
“(a)
which is equal to the chargeable amount, and
(b)
to which the charge to corporation tax on income applies.”
      (3)
In subsection (10) for “section 91H or 91I of the Finance Act 1996” substitute
“Chapter 8 of Part 6 of the Corporation Tax Act 2009 (returns from
40
partnerships)”.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
713

573   (1)
Amend section 196 (relief for employers in respect of contributions paid) as
follows.
      (2)
In subsection (2) for “(trading income) or Case I or II of Schedule D”
substitute “or Part 3 of CTA 2009 (trading income)”.
      (3)
In subsection (3) for “section 75 of ICTA” substitute “Chapter 2 of Part 16 of
5
CTA 2009”.
574
In section 196A(4) (power to restrict relief)—
(a)
in paragraph (a) for “(trading income) or Case I or II of Schedule D”
substitute “or Part 3 of CTA 2009 (trading income)”, and
(b)
in paragraph (b) for “section 75 of ICTA” substitute “section 1219 of
10
CTA 2009”.
575
In section 197(10) (spreading of relief)—
(a)
in paragraph (a), for “(trading income) or Case I or II of Schedule D,”
substitute “or Part 3 of CTA 2009 (trading income),” and
(b)
in paragraph (b) for the words from “section 75” to the end substitute
15
“section 76 of ICTA (expenses of insurance companies) or Chapter 2
of Part 16 of CTA 2009 (expenses of management: companies with
investment business), an accounting period.”
576
In section 199A(10) (indirect contributions)—
(a)
in paragraph (a) for “(trading income) or Case I or II of Schedule D”
20
substitute “or Part 3 of CTA 2009 (trading income)”, and
(b)
in paragraph (b) for “section 75 of ICTA” substitute “Chapter 2 of
Part 16 of CTA 2009”.
577
In section 200 (no other relief for employers in respect of contributions)—
(a)
in paragraph (a) for “(trading income) or Case I or II of Schedule D”
25
substitute “or Part 3 of CTA 2009 (trading income)”, and
(b)
in paragraph (b) for “section 75 of ICTA” substitute “Chapter 2 of
Part 16 of CTA 2009”.
578   (1)
Amend section 246 (restriction of deduction for non-contributory provision)
as follows.
30
      (2)
In subsection (2)—
(a)
in paragraph (a) for “(trading income) or Case I or II of Schedule D”
substitute “or Part 3 of CTA 2009 (trading income)”, and
(b)
in paragraph (b) for “section 75 of ICTA” substitute “Chapter 2 of
Part 16 of CTA 2009”.
35
      (3)
In subsection (3)—
(a)
in paragraph (a) for “(trading income) or Case I or II of Schedule D,”
substitute “or Part 3 of CTA 2009 (trading income),” and
(b)
in paragraph (b) for “of section 75 or 76 of ICTA in relation to the
employer,” substitute “in relation to the employer of section 76 of
40
ICTA or Chapter 2 of Part 16 of CTA 2009,”.
579
In section 246A(4) (case where no relief for provision by an employer)—
(a)
in paragraph (a) for “(trading income) or Case I or II of Schedule D”
substitute “or Part 3 of CTA 2009 (trading income)”, and
(b)
in paragraph (b) for “section 75 of ICTA” substitute “Chapter 2 of
45
Part 16 of CTA 2009”.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
714

580
In section 280(1) (abbreviations and general index)—
(a)
omit the “and” immediately after the entry for “ITTOIA 2005”, and
(b)
after the entry for “ITA 2007” insert “, and
“CTA 2009” means the Corporation Tax Act 2009.”
581   (1)
Amend Schedule 26 (offshore funds) as follows.
5
      (2)
In paragraph 1(6) for “Chapter 2 of Part 4 of the Finance Act 1996” substitute
“Part 5 of the Corporation Tax Act 2009”.
      (3)
In paragraph 2(6) in the definition of “derivative contract” for “Schedule 26
to the Finance Act 2002” substitute “Part 7 of the Corporation Tax Act 2009”.
Energy Act 2004 (c. 20)
10
582
The Energy Act 2004 is amended as follows.
583   (1)
Amend section 27 (tax exemption for NDA activities) as follows.
      (2)
In subsection (8)—
(a)
in the definition of “trading income”—
(i)
in paragraph (a), after “trade” insert “carried on wholly or
15
partly in the United Kingdom”, and
(ii)
in paragraph (b) for “Case I of Schedule D” substitute
“Chapter 2 of Part 3 of the Corporation Tax Act 2009”, and
(b)
in the definition of “trading losses”—
(i)
after “trade” insert “carried on wholly or partly in the United
20
Kingdom”, and
(ii)
for “Case I of Schedule D” substitute “Chapter 2 of Part 3 of
the Corporation Tax Act 2009”.
      (3)
In subsection (9)—
(a)
in paragraph (a) for “Chapter 2 of Part 4 of the Finance Act 1996 (c.
25
8)” substitute “Part 5 of the Corporation Tax Act 2009”, and
(b)
in paragraph (b) for “under Schedule 26 to the Finance Act 2002 (c.23)
(derivative contracts)” substitute “in accordance with Part 7 of the
Corporation Tax Act 2009 (derivative contracts)”.
584   (1)
Amend section 28 (taxation of activities of the Nuclear Decommissioning
30
Authority chargeable under Case VI of Schedule D) as follows.
      (2)
In subsection (1)—
(a)
in paragraph (a) for “under Case VI of Schedule D” substitute “under
or by virtue of any provision to which section 834A of the Income
and Corporation Taxes Act 1988 (miscellaneous charges) applies”,
35
and
(b)
in the words after paragraph (b) for “Case I of Schedule D” substitute
“Chapter 2 of Part 3 of the Corporation Tax Act 2009”.
      (3)
In subsection (2)(b) for the words from “under” to the end substitute “under
or by virtue of a provision to which section 834A of the Income and
40
Corporation Taxes Act 1988 applies, other than section 979 of the
Corporation Tax Act 2009 (income not otherwise charged).”
      (4)
In the title for “Case VI of Schedule D” substitute “miscellaneous
provisions”.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
715

585
In section 44(2) (extinguishment of BNFL losses for tax purposes)—
(a)
in paragraph (b) for “under Case VI of Schedule D” substitute “under
or by virtue of any provision to which section 834A of the Income
and Corporation Taxes Act 1988 (miscellaneous charges) applies”,
(b)
in paragraph (c) for “section 75(9) of the Income and Corporation
5
Taxes Act 1988” substitute “section 1223 of the Corporation Tax Act
2009 (carrying forward expenses of management and other
amounts)”,
(c)
in paragraph (d) for “Schedule A losses” and “that Act” substitute
“UK property business losses” and “the Income and Corporation
10
Taxes Act 1988” respectively, and
(d)
in paragraph (h) for “subsection (1) of section 83 of the Finance Act
1996 (c. 8)” and “subsection (3A) of that section” substitute “section
456(1) of the Corporation Tax Act 2009” and “section 457(1) of that
Act” respectively.
15
586   (1)
Amend Schedule 9 (taxation provisions relating to nuclear transfer schemes)
as follows.
      (2)
In paragraph 11—
(a)
in sub-paragraph (2) for “Chapter 2 of Part 4 of the Finance Act 1996
(c. 8)” substitute “Part 5 of the Corporation Tax Act 2009”, and
20
(b)
in sub-paragraph (3) for “Chapter 2 of Part 4 of the Finance Act 1996”
and “that Chapter” substitute “Part 5 of the Corporation Tax Act
2009” and “that Part” respectively.
      (3)
In paragraph 12—
(a)
in sub-paragraph (2) for “Schedule 26 to the Finance Act 2002 (c. 23)”
25
substitute “Part 7 of the Corporation Tax Act 2009”, and
(b)
in sub-paragraph (3)—
(i)
for “Schedule 26 to the Finance Act 2002” substitute “Part 7 of
the Corporation Tax Act 2009”, and
(ii)
for “that Schedule” substitute “that Part”.
30
      (4)
In paragraph 15(4), in the definition of “relevant trading profits and losses”
for the words from “under” to the end substitute “under Part 3 of the
Corporation Tax Act 2009 in respect of the trade or part of a trade in question
for periods in which the trade was carried on wholly or partly in the United
Kingdom.”
35
      (5)
In paragraph 23—
(a)
in sub-paragraph (2) for “Chapter 2 of Part 4 of the Finance Act 1996
(c. 8)” substitute “Part 5 of the Corporation Tax Act 2009”, and
(b)
in sub-paragraph (3) for “Chapter 2 of Part 4 of the Finance Act 1996
(c. 8)” and “that Chapter” substitute “Part 5 of the Corporation Tax
40
Act 2009” and “that Part” respectively.
      (6)
In paragraph 24(2) for “Schedule 26 to the Finance Act 2002 (c. 23)” substitute
“Part 7 of the Corporation Tax Act 2009”.
      (7)
In paragraph 24(3)—
(a)
for “Schedule 26 to the Finance Act 2002” substitute “Part 7 of the
45
Corporation Tax Act 2009”, and
(b)
for “that Schedule” substitute “that Part”.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
716

      (8)
In paragraph 27(4), in the definition of “relevant trading profits and losses”
for the words from “under” to the end substitute “under Part 3 of the
Corporation Tax Act 2009 in respect of the trade or part of a trade in question
for periods in which the trade was carried on wholly or partly in the United
Kingdom.”
5
      (9)
In paragraph 33—
(a)
in paragraph (a) for “Chapter 2 of Part 4 of the Finance Act 1996 (c.
8)” substitute “Part 5 of the Corporation Tax Act 2009”, and
(b)
in paragraph (b) for “Schedule 26 to the Finance Act 2002 (c. 23)”
substitute “Part 7 of the Corporation Tax Act 2009”.
10
Income Tax (Trading and Other Income) Act 2005 (c. 5)
587
The Income Tax (Trading and Other Income) Act 2005 is amended as
follows.
588
In section 22(2)(b) (payments for wayleaves) for “would otherwise be
brought into account in calculating the profits” substitute “incurred by the
15
trader in respect of the wayleave would otherwise be brought into account
in calculating profits”.
589   (1)
Amend section 48 (car or motor cycle hire) as follows.
      (2)
In subsection (3) for “the deduction is reduced as a result of subsection (2)”
substitute “a deduction is reduced as a result of subsection (2), or a
20
corresponding provision,”.
      (3)
In subsection (4)(a) omit “under section 97 (debts incurred and later
released)”.
      (4)
After subsection (4) insert—
“(4A)
In this section “corresponding provision” means—
25
(a)
section 56(2) of CTA 2009 (car or motor cycle hire: trade
profits and property income),
(b)
section 1251(2) of CTA 2009 (car or motor cycle hire: expenses
of management), or
(c)
section 76ZN(2) of ICTA (car or motor cycle hire: expenses of
30
insurance companies).”
590
In section 49(2)(b) (car or motor cycle hire: supplementary) after “the car”
insert “or motor cycle”.
591
In section 60(6) (tenants under taxed leases: introduction) after “288” insert
“below or section 228 of CTA 2009”.
35
592   (1)
Amend section 64 (restriction on section 61 expenses: lease premium
receipts) as follows.
      (2)
For subsection (1) substitute—
“(1)
This section applies if a lease has been granted out of the taxed lease
and—
40
(a)
in calculating the amount of a receipt of a property business
under Chapter 4 of Part 3 (profits of property businesses:
lease premiums etc) in respect of the lease, there is a