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Corporation Tax Bill


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

731

 

      (7)  

In paragraph 28—

(a)   

in sub-paragraph (1) for “paragraph 11 of Schedule 9 to the Finance

Act 1996 (c. 8)” substitute “section 444 of the Corporation Tax Act

2009”, and

(b)   

in sub-paragraph (2) for “Chapter 2 of Part 4 of the Finance Act 1996”

5

and “that Chapter” substitute “Part 5 of the Corporation Tax Act

2009” and “that Part” respectively.

Finance (No. 2) Act 2005 (c. 22)

668        

The Finance (No. 2) Act 2005 is amended as follows.

669        

In section 18 (section 17(3): specific powers) for subsection (2)(c) substitute—

10

“(c)   

modify the meaning of “relevant holding” for the purposes

of—

(i)   

sections 490 and 492 of the Corporation Tax Act 2009

(loan relationships), and

(ii)   

section 587 of that Act (derivative contracts).”

15

670   (1)  

Amend section 26 (receipts cases) as follows.

      (2)  

In subsection (7) for the words from “person who” to the end substitute

“person who—

(a)   

is charged to corporation tax under Part 3 of CTA 2009

(trading income) in respect of distributions of companies that

20

are received in the course of a trade not consisting of

insurance business, or

(b)   

would be so charged if resident in the United Kingdom.”

      (3)  

In subsection (10)—

(a)   

for “Chapter 2 of Part 4 of FA 1996” substitute “Part 5 of CTA 2009

25

(loan relationships)”, and

(b)   

for the words from “section 91A” to the end substitute “section 523 of

that Act (application of that Part of that Act to certain shares as rights

under creditor relationship)”.

671        

In section 27(2) (rule as to qualifying payment) for the words from “an

30

amount” to the end substitute “a receipt of the company which is chargeable

for that period under the charge to corporation tax on income”.

672        

In section 71 (interpretation) after the definition of “CAA 2001” insert—

“CTA 2009” means the Corporation Tax Act 2009;”.

673        

In Schedule 6 (accounting practice and related matters)—

35

(a)   

omit paragraph 7 (loan relationships with embedded derivatives),

and

(b)   

omit paragraph 9 (exchange gains and losses).

674        

In Schedule 7 (avoidance involving financial arrangements) in paragraph

14—

40

(a)   

in sub-paragraph (4)(b) after “1996” insert “or Part 5 of CTA 2009”,

and

(b)   

in sub-paragraph (5) after “1996” insert “and Part 5 of CTA 2009”.

 
 

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

732

 

Finance Act 2006 (c. 25)

675        

The Finance Act 2006 is amended as follows.

676        

Omit sections 31 to 41 (provisions about films, in particular film tax relief).

677        

In section 42(2) (film tax relief: further provisions) omit—

(a)   

“Part 1 deals with entitlement to the relief;”, and

5

(b)   

“Part 4 is about provisional entitlement to relief”.

678        

Omit sections 43 to 45 (film losses).

679        

At the end of each of sections 46 and 47 insert—

“(6)   

The provisions of sections 1181 to 1187 of CTA 2009 apply for the

purposes of this section as if this section were contained in Part 15 of

10

that Act.”

680        

Omit sections 48 to 50 (sound recordings).

681        

Omit section 52 (films: application of provisions to certain films already in

production).

682        

Omit section 53(2) (films and sound recordings: commencement etc).

15

683        

In section 97 (beneficial loans to employees)—

(a)   

in subsection (1)(a) after “2005” insert “or section 503 or 504 of CTA

2009”,

(b)   

in subsection (2)(b)(i) after “section 47” insert “of FA 2005 or section

503 of CTA 2009”, and

20

(c)   

in subsection (2)(b)(ii) after “section 47A” insert “of FA 2005 or

section 504 of CTA 2009”.

684        

In section 104(1) (property rental business)—

(a)   

in paragraph (a)—

(i)   

for “Schedule A business” substitute “UK property business”,

25

and

(ii)   

for “section 832(1) of ICTA” substitute “section 205 of CTA

2009”, and

(b)   

in paragraph (b) for “section 70A(4) of ICTA” substitute “section 206

of that Act”.

30

685        

In section 112 (entry charge) for subsection (1) substitute—

“(1)   

A company to which this Part applies shall be chargeable under the

charge to corporation tax on income on an amount of notional

income calculated in accordance with subsection (3).”

686        

In section 115(4) (profit: financing-cost ratio)—

35

(a)   

in paragraph (a) for “Chapter 2 of Part 4 of FA 1996” and “section

103(1A) and (1B)” substitute “Part 5 of CTA 2009” and “section 475

respectively,

(b)   

in paragraph (b) for “that Chapter” substitute “that Part”, and

(c)   

in paragraph (c) for “under Schedule 26 to FA 2002” substitute “in

40

accordance with Part 7 of CTA 2009”.

687        

In section 117(3)(b) (cancellation of tax advantage) omit “under Case VI of

Schedule D”.

 
 

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

733

 

688   (1)  

Amend section 120 (calculation of profits) as follows.

      (2)  

For subsection (2) substitute—

“(2)   

Profits (of any kind) are calculated in the same way as profits of a UK

property business are calculated for the purposes of the charge to tax

under Chapter 2 of Part 4 of CTA 2009 (as to which see, in particular,

5

section 210 of that Act).”

      (3)  

In subsection (3) for the words from the beginning to “(Schedule A:”

substitute “Section 211(1) of CTA 2009 (property businesses:”.

      (4)  

For subsection (4)(c) substitute—

“(c)   

“embedded derivatives” is to be read in accordance with

10

section 584 or 586 (as the case may be) of CTA 2009, and

(d)   

“the host contract” means—

(i)   

the rights and liabilities within section 584(1)(b)(ii) of

CTA 2009, or

(ii)   

the rights and liabilities within section 586(1)(b)(ii) of

15

that Act,

   

as the case may be.”

      (5)  

In subsection (5)—

(a)   

for “Schedule 26 to FA 2002” substitute “Part 7 of CTA 2009”, and

(b)   

for “paragraph 4(2)(b)” substitute “section 589(2)(b) and (c) of that

20

Act”.

689   (1)  

Amend section 121 (distributions: liability to tax) as follows.

      (2)  

In subsection (1)(a) for “Schedule A business” substitute “UK property

business (within the meaning of section 205 of CTA 2009)”.

      (3)  

In subsection (2)(a) for “Schedule A business” substitute “UK property

25

business (within the meaning of section 205 of CTA 2009)”.

      (4)  

In subsection (3)(a) for the words from “dealer” to the end substitute “person

who is charged to tax under Part 3 of CTA 2009 (trading income) in respect

of distributions made by companies that are received in the course of a trade

not consisting of insurance business,”.

30

      (5)  

Omit subsection (4).

      (6)  

In subsection (6)—

(a)   

in paragraph (a) for “Schedule A business” substitute “UK property

business (within the meaning of section 205 of CTA 2009)”, and

(b)   

in paragraph (c) for “section 70A(4) of ICTA” substitute “section 206

35

of CTA 2009”.

690        

In section 136(2) (availability of group reliefs) for paragraphs (d) to (f)

substitute—

“(d)   

Chapters 4 and 6 to 8 of Part 5 of CTA 2009 (loan

relationships),

40

(e)   

Part 7 of that Act (derivative contracts), and

(f)   

Part 8 of that Act (intangible fixed assets).”

 
 

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

734

 

691        

In section 139(2) (manufactured dividends), in the provision substituted for

paragraph 2(2) of Schedule 23A to ICTA, in sub-paragraph (2B)(b) for

“section 75 of this Act” substitute “Chapter 2 of Part 16 of CTA 2009”.

692        

In section 179 (interpretation) after the definition of “CAA 2001” insert—

““CTA 2009” means the Corporation Tax Act 2009;”.

5

693        

Omit Schedule 4 (taxation of activities of film production company).

694        

In Schedule 5 (film tax relief: further provisions)—

(a)   

omit Part 1 (entitlement to film tax relief),

(b)   

omit paragraphs 24 and 25, and

(c)   

omit Part 4 (provisional entitlement to relief).

10

695   (1)  

Amend Schedule 10 (sale etc of lessor companies etc) as follows.

      (2)  

In paragraph 5(1) after “trade” insert “carried on wholly or partly in the

United Kingdom” and for “Case I of Schedule D” substitute “Chapter 2 of

Part 3 of CTA 2009”.

      (3)  

In paragraph 23(5) for the words from “means the business” to the end

15

substitute “means the business the profits or losses of which are determined,

in relation to the company, under section 1259 of CTA 2009.”

      (4)  

In paragraph 28(2) for paragraphs (a) and (b) substitute “any matter that

would be taken into account in determining under section 1262 of CTA 2009

(but without regard to sections 1263 and 1264 of that Act) the company’s

20

share at that time of the profits or loss of the business.”

      (5)  

In paragraph 38(9)—

(a)   

in paragraph (a) for “(Schedule A losses)” substitute “(UK property

business losses)”, and

(b)   

in paragraph (d) for “(Case VI losses)” substitute “(losses from

25

miscellaneous transactions)”.

696   (1)  

Amend Schedule 15 (accountancy change: spreading of adjustment), Part 2

(corporation tax) as follows.

      (2)  

In paragraph 9(1), in the words after paragraph (c), for “section 64 of and

Schedule 22 to FA 2002” substitute “Chapter 14 of Part 3 of or section 262 of

30

CTA 2009”.

      (3)  

In paragraph 10(5)(a) for “Schedule 22 to FA 2002” substitute “Chapter 14 of

Part 3 of or section 262 of CTA 2009”.

      (4)  

In paragraph 11(1)(b) for “section 12(7ZA) of ICTA” substitute “section 10 of

CTA 2009”.

35

      (5)  

In paragraph 12(1)(b) for “section 12(7) of ICTA” substitute “section 12 of

CTA 2009”.

      (6)  

In paragraph 14(1)(b) for “Schedule A business” substitute “UK property

business”.

697   (1)  

Amend Schedule 16 (real estate investment trusts: excluded business and

40

income) as follows.

      (2)  

In paragraph 4 for “Schedule A” substitute “Chapter 3 of Part 4 of CTA

2009”.

 
 

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

735

 

      (3)  

In paragraph 13 for “section 118ZA(4) of ICTA” substitute “section 1273(4)

of CTA 2009”.

698   (1)  

Amend Schedule 17 (group real estate investment trusts: modifications) as

follows.

      (2)  

In paragraph 11(1)(d)(ii) for “a charge to corporation tax under Case VI of

5

Schedule D” substitute “the charge to corporation tax on income”.

      (3)  

In paragraph 32(1)(b) for “or as profits of a Schedule A business” substitute

“or as profits of a UK property business under Chapter 3 of Part 4 of CTA

2009”.

Income Tax Act 2007 (c. 3)

10

699        

The Income Tax Act 2007 is amended as follows.

700        

For section 5 substitute—

“5      

Income tax and companies

Section 3 of CTA 2009 disapplies the provisions of the Income Tax

Acts relating to the charge to income tax in relation to income of a

15

company (not accruing to it in a fiduciary or representative capacity)

if—

(a)   

the company is UK resident, or

(b)   

the company is non-UK resident and the income is within its

chargeable profits as defined by section 19 of that Act (profits

20

attributable to its permanent establishment in the United

Kingdom).”

701        

In section 276(3) (conditions relating to income) for “paragraph 14(3) of

Schedule 26 to FA 2002 as if they were non-trading credits or non-trading

debits” substitute “section 574 of CTA 2009 (non-trading credits and debits

25

to be brought into account under Part 5 of that Act)”.

702        

In section 489(6) (the “applicable period” in relation to shares) for

“paragraph 9 of Schedule 4AA to ICTA” substitute “section 989 of CTA

2009”.

703        

In section 550(a) (meaning of “relievable gift”) for “section 83A of ICTA”

30

substitute “section 105 of CTA 2009”.

704        

In section 557(1)(b)(ii) (substantial donor transactions: supplementary) after

“2005” insert “or section 501(2) of CTA 2009”.

705   (1)  

Amend section 835 (residence rules for trustees and companies) as follows.

      (2)  

Omit subsection (2).

35

      (3)  

In the title omit “and companies”.

706        

After section 835 insert—

“835A   

 Residence of companies

Chapter 3 of Part 2 of CTA 2009 (rules for determining residence of

companies) applies for the purposes of the Income Tax Acts as it

40

applies for the purposes of the Corporation Tax Acts.”

 
 

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

736

 

707        

In section 899(4)(b) (meaning of “qualifying annual payment”) for “charged

to corporation tax under Case III of Schedule D” substitute “which is—

(i)   

required to be brought into account under Part 5 of

CTA 2009 (loan relationships) as a non-trading credit,

or

5

(ii)   

from a source in the United Kingdom and chargeable

to corporation tax under Chapter 5 of Part 10 of that

Act (distribution from unauthorised unit trusts) or

Chapter 7 of that Part (annual payments not

otherwise charged).”

10

708        

In section 904 (annual payments for dividends or non-taxable consideration)

for subsection (2) substitute—

“(2)   

The payment must be—

(a)   

a payment charged to income tax under Part 5 of ITTOIA

2005 (miscellaneous income), or

15

(b)   

a payment which is—

(i)   

required to be brought into account under Part 5 of

CTA 2009 (loan relationships) as a non-trading credit,

or

(ii)   

from a source in the United Kingdom and chargeable

20

to corporation tax under Chapter 5 of Part 10 of that

Act (distributions from unauthorised unit trusts) or

Chapter 7 of that Part (annual payments not

otherwise charged).”

709   (1)  

Amend section 910 (proceeds of a sale of patent rights: payments to non-UK

25

residents) as follows.

      (2)  

In subsection (1)(b) for “section 524(3) of ICTA” substitute “section 912 of

CTA 2009”.

      (3)  

In subsection (6)(b) for “section 524(9) of ICTA” substitute “section 919 of

CTA 2009”.

30

710        

In section 934(4) (non-UK resident companies) for “section 11(2) of ICTA”

substitute “section 19 of CTA 2009”.

711        

In section 937(5)(c) (partnerships)—

(a)   

for “section 11(2) of ICTA” substitute “section 19 of CTA 2009”, and

(b)   

for “sections 114 and 115 of ICTA” substitute “Part 17 of that Act”.

35

712        

In section 939(1)(b) (duty to retain bonds where issue treated as payment of

interest) for “section 582(1)(a) of ICTA” substitute “section 413 of CTA 2009”.

713   (1)  

Amend section 941 (deemed payments to unit holders and deemed

deductions of income tax) as follows.

      (2)  

In subsection (1), after “ITTOIA 2005” insert “or Chapter 5 of Part 10 of CTA

40

2009”.

      (3)  

In subsection (2), after “ITTOIA 2005” insert “and section 973(2) of CTA

2009”.

      (4)  

Omit subsections (4) and (5).

      (5)  

In subsection (6)—

45

 
 

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

737

 

(a)   

in the definition of “deemed deduction”, omit “or (5)”, and

(b)   

in the definition of “deemed payment”, omit “or (4)”.

714        

In section 948(2) (meaning of “accounting period”) for the words from

“section” to “assessment)” substitute “Chapter 2 of Part 2 of CTA 2009

(accounting periods)”.

5

715        

In section 965(2) (overview of sections 966 to 970) for “section 556 of ICTA”

substitute “section 1309 of CTA 2009”.

716   (1)  

Amend section 971 (income tax in respect of non-resident landlords) as

follows.

      (2)  

In subsection (2) for the words from “chargeable” to the end substitute

10

“chargeable as the profits of a UK property business under Chapter 3 of Part

3 of ITTOIA 2005 or Chapter 3 of Part 4 of CTA 2009.”

      (3)  

In subsection (3)(a) for “Schedule A business, or a UK property business,”

substitute “UK property business (within the meaning of Chapter 2 of Part 3

of ITTOIA 2005 or Chapter 2 of Part 4 of CTA 2009)”.

15

717        

In section 976(6) (arrangements for payments of interest less tax or at a

specified net rate) for paragraph (b) substitute—

“(b)   

interest which is required to be brought into account under

Part 5 of CTA 2009 (loan relationships) as a non-trading

credit of the recipient.”

20

718        

In section 980(2) (derivative contracts: exception from duties to deduct) for

“Schedule 26 to FA 2002” substitute “Part 7 of CTA 2009”.

719        

In section 989 (definitions) omit the definition of “Schedule A business”.

720        

In section 1017 (abbreviated references to Acts) after the definition of “CAA

2001” insert—

25

““CTA 2009” means the Corporation Tax Act 2009,”.

721        

In Schedule 4 (index of defined expressions) omit the entry for “Schedule A

business”.

Finance Act 2007 (c. 11)

722        

The Finance Act 2007 is amended as follows.

30

723        

In section 113 (interpretation) after the definition of “CRCA 2005” insert—

““CTA 2009” means the Corporation Tax Act 2009;”.

724        

In Schedule 3 (managed service companies) omit paragraph 10.

725   (1)  

Amend Schedule 7 (insurance business: gross roll-up business etc) as

follows.

35

      (2)  

In paragraph 85—

(a)   

in sub-paragraph (1) omit “(a “Case VI loss”)” and “(a “Case I loss”)”,

and

(b)   

in sub-paragraph (2)—

(i)   

for “Case VI losses” substitute “losses so treated”, and

40

(ii)   

for “Case I losses” substitute “losses of the transferee”.

 
 

 
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