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
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”.