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
738

      (3)
For the italic cross-heading before paragraph 85 substitute “Losses
transferred under section 444AZA”.
      (4)
In paragraph 86(4) and (5) for “Case VI” substitute “gross roll-up business”.
      (5)
For the italic cross-heading before paragraph 86 substitute “Losses
transferred under section 444AZB”.
5
726   (1)
Amend Schedule 13 (sale and repurchase of securities) as follows.
      (2)
In paragraph 1(1) after “in that case” insert “in respect of chargeable gains”.
      (3)
Omit paragraphs 2 to 5, 7 to 10 and 12.
      (4)
In paragraph 14—
(a)
in the definition of “creditor quasi-repo” for “paragraph 8” substitute
10
“section 544 of CTA 2009”,
(b)
in the definition of “creditor repo” for “paragraph 7” substitute
“section 543 of CTA 2009”,
(c)
in the definition of “debtor quasi-repo” for “paragraph 3” substitute
“section 549 of CTA 2009”,
15
(d)
in the definition of “debtor repo” for “paragraph 2” substitute
“section 548 of CTA 2009”, and
(e)
in the definition of “the loan relationship rules” for “Chapter 2 of Part
4 of FA 1996” substitute “Part 5 of CTA 2009”.
      (5)
In paragraph 15(9)(b) for “paragraph 12” and “paragraph 10” substitute
20
“section 547 of CTA 2009” and “section 546 of that Act” respectively.
727
In paragraph 28(fa) of Schedule 24 (penalties for errors)—
(a)
in paragraph (i) for “Schedule 20 to FA 2000” substitute “Chapter 2
or 7 of Part 13 of CTA 2009”,
(b)
in paragraph (ii) for “Schedule 22 to FA 2001” substitute “Chapter 3
25
or 4 respectively of Part 14 of CTA 2009”,
(c)
omit paragraph (iii), and
(d)
in paragraph (iv) for “Schedule 5 to FA 2006” substitute “Chapter 3
of Part 15 of CTA 2009”.
Finance Act 2008 (c. 9)
30
728
The Finance Act 2008 is amended as follows.
729
Omit section 29 (cap on R&D aid).
730
Omit section 36(1) (company gains from investment life insurance contracts
etc).
731
In section 77(6), in the words after paragraph (b) for “section 578A of ICTA
35
and section 50 of ITTOIA 2005 apply” substitute “section 50 of ITTOIA 2005
applies”.
732
In section 154(6) (stamp duty and stamp duty reserve tax: alternative
investment bonds) after “2005” insert “or section 507 of CTA 2009”.
733
In section 165(1) (interpretation) after the definition of “CRCA 2005” insert—
40
““CTA 2009” means the Corporation Tax Act 2009,”.
734
In Schedule 10 (cap on R&D aid), omit paragraphs 1 to 7.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
739

735
Omit Schedule 13 (company gains from investment life insurance contracts).
736
In Schedule 15 (changes in trading stock), omit Part 2.
737
In Schedule 25 (first-year tax credits)—
(a)
in paragraph 14(6)(b) for “paragraph 4(4) of Schedule 11 to FA 1996”
substitute “section 391(3)(b) of CTA 2009”, and
5
(b)
in paragraph 16(3)(b) for “paragraph 4(4) of Schedule 11 to FA 1996”
substitute “section 391(3)(b) of CTA 2009”.
Crossrail Act 2008 (c.18)
738
The Crossrail Act 2008 is amended as follows.
739   (1)
Amend Schedule 13 (transfer schemes: tax provisions) as follows.
10
      (2)
In paragraph 3 (interpretation: supplementary) after the definition of “CAA
2001” insert—
““CTA 2009” means the Corporation Tax Act 2009;”.
      (3)
In paragraph 5(5) (computation of profits and losses in respect of transfer of
trade) for the words from “under” to the end substitute “under Part 3 of CTA
15
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.”
      (4)
In paragraph 6(5) (transfers of trading stock) for “has the same meaning as
in section 100 of ICTA” substitute “has the meaning given by section 163 of
CTA 2009”.
20
      (5)
In paragraph 13 (continuity in relation to transfer of intangible assets)—
(a)
in sub-paragraph (1) for “Schedule 29 to FA 2002” substitute “Part 8
of CTA 2009”, and
(b)
in sub-paragraph (2) for “Schedule”, in both places where it occurs,
substitute “Part”.
25
      (6)
In paragraph 14 (continuity in relation to loan relationships)—
(a)
in sub-paragraph (1) for “Chapter 2 of Part 4 of FA 1996” substitute
“Part 5 of CTA 2009”, and
(b)
in sub-paragraph (2) for “paragraph 12(8) of Schedule 9 to” substitute
“section 335(6) of”.
30
      (7)
In paragraph 15 (continuity in relation to derivative contracts)—
(a)
in sub-paragraph (1) for “Schedule 26 to FA 2002” substitute “Part 7
of CTA 2009”, and
(b)
in sub-paragraph (2) for “paragraph 28(6) of that Schedule”
substitute “section 624(3) of that Act”.
35
      (8)
In paragraph 18(6) (transfers of trading stock) for “has the same meaning as
in section 100 of ICTA” substitute “has the meaning given by section 163 of
CTA 2009”.
      (9)
In paragraph 23 (neutral effect of transfer of intangible assets)—
(a)
in sub-paragraph (1) for “Schedule 29 to FA 2002” substitute “Part 8
40
of CTA 2009”, and
(b)
in sub-paragraph (2) for “Schedule”, in both places where it occurs,
substitute “Part”.

Corporation Tax Bill
Schedule 2 — Transitionals and savings
Part 1 — General provisions
740

     (10)
In paragraph 24 (neutral effect of transfer for loan relationships and
derivative contracts)—
(a)
in sub-paragraph (a) for “Chapter 2 of Part 4 of FA 1996” substitute
“Part 5 of CTA 2009”, and
(b)
in sub-paragraph (b) for “Schedule 26 to FA 2002” substitute “Part 7
5
of that Act”.
     (11)
In paragraph 34(6) (transfers of trading stock) for the words from “has” to
the end substitute “has the meaning given by section 174 of ITTOIA 2005 (as
respects income tax) or section 163 of CTA 2009 (as respects corporation
tax).”
10
     (12)
In paragraph 40 (transfers involving private persons: loan relationships)—
(a)
in sub-paragraph (1) for “Paragraph 11 of Schedule 9 to FA 1996”
substitute “Section 444 of CTA 2009”, and
(b)
in sub-paragraph (2) for “Chapter 2 of Part 4 of FA 1996” and “that
Chapter” substitute “Part 5 of CTA 2009” and “that Part”
15
respectively.
Schedule 2
Section 1325

Transitionals and savings
Part 1
General provisions
20
Continuity of the law: general
1
The repeal of provisions and their enactment in a rewritten form by this Act
does not affect the continuity of the law.
2
Paragraph 1 does not apply to any change made by this Act in the effect of
the law.
25
3
Any subordinate legislation or other thing which—
(a)
has been made or done, or has effect as if made or done, under or for
the purposes of a superseded enactment so far as it applied for
relevant tax purposes, and
(b)
is in force or effective immediately before the commencement of the
30
corresponding rewritten provision,

has effect after that commencement as if made or done under or for the
purposes of the rewritten provision.
4     (1)
Any reference (express or implied) in this Act, another enactment or an
instrument or document to a rewritten provision is to be read as including,
35
in relation to times, circumstances or purposes in relation to which any
corresponding superseded enactment had effect for relevant tax purposes, a
reference to the superseded enactment so far as applying for those relevant
tax purposes.
      (2)
In particular, any reference (express or implied) in this Act, another
40
enactment or an instrument or document to—
(a)
the profits of a UK property business, or

Corporation Tax Bill
Schedule 2 — Transitionals and savings
Part 1 — General provisions
741

(b)
similar concepts created by this Act,

is to be read as including, in relation to times, circumstances or purposes in
relation to which any corresponding concept in a superseded enactment had
effect for corporation tax purposes, a reference to that concept so far as
applying for corporation tax purposes.
5
      (3)
Any reference (express or implied) in this Act, another enactment or an
instrument or document to—
(a)
things done under or for the purposes of a rewritten provision, or
(b)
things falling to be done under or for the purposes of a rewritten
provision,
10

is to be read as including, in relation to times, circumstances or purposes in
relation to which any corresponding superseded enactment had effect for
relevant tax purposes, a reference to things done or falling to be done under
or for the purposes of the superseded enactment so far as applying for those
relevant tax purposes.
15
5     (1)
Any reference (express or implied) in any enactment, instrument or
document to a superseded enactment in its application for relevant tax
purposes is to be read, so far as is required for those relevant tax purposes,
as including, in relation to times, circumstances or purposes in relation to
which any corresponding rewritten provision has effect, a reference to the
20
rewritten provision.
      (2)
In particular, any reference (express or implied) in any enactment,
instrument or document to Schedule A or D or the Cases of Schedule D in
their application for corporation tax purposes is to be read, so far as is
required for corporation tax purposes, as including, in relation to times,
25
circumstances or purposes in relation to which any corresponding rewritten
concept has effect, as a reference to the rewritten concept.
      (3)
Any reference (express or implied) in any enactment, instrument or
document to—
(a)
things done under or for the purposes of a superseded enactment in
30
its application for relevant tax purposes, or
(b)
things falling to be done under or for the purposes of a superseded
enactment in its application for relevant tax purposes,

is to be read, so far as is required for those relevant tax purposes, as
including, in relation to times, circumstances or purposes in relation to
35
which any corresponding rewritten provision has effect, a reference to
things done or falling to be done under or for the purposes of the rewritten
provision.
6
Paragraphs 1 to 5 have effect instead of section 17(2) of the Interpretation Act
1978 (c. 30) (but are without prejudice to any other provision of that Act).
40
7
Paragraphs 4 and 5 apply only so far as the context permits.
General saving for old transitional provisions and savings
8     (1)
The repeal by this Act of a transitional or saving provision relating to the
coming into force of a provision rewritten in this Act does not affect the
operation of the transitional or saving provision, so far as it is not specifically
45
rewritten in this Act but remains capable of having effect in relation to the
corresponding provision of this Act.

Corporation Tax Bill
Schedule 2 — Transitionals and savings
Part 2 — Changes in the law
742

      (2)
The repeal by this Act of an enactment previously repealed subject to
savings does not affect the continued operation of those savings.
      (3)
The repeal by this Act of a saving on the previous repeal of an enactment
does not affect the operation of the saving so far as it is not specifically
rewritten in this Act but remains capable of having effect.
5
Interpretation
9     (1)
In this Part—
“enactment” includes subordinate legislation (within the meaning of
the Interpretation Act 1978 (c. 30)),
“relevant tax purposes” means, in relation to a superseded enactment,
10
tax purposes for which the enactment has been rewritten by this Act,
and
“superseded enactment” means an earlier enactment which has been
rewritten by this Act for certain tax purposes (whether it applied
only for those purposes or for those and other tax purposes).
15
      (2)
References in this Part to the repeal of a provision include references to its
revocation and to its express or implied disapplication for corporation tax
purposes.
      (3)
References in this Part to tax purposes are not limited to corporation tax
purposes.
20
Part 2
Changes in the law
10    (1)
This paragraph applies if, in the case of any person—
(a)
a thing is done or an event occurs before 1 April 2009, and
(b)
because of a change in the law made by this Act, the corporation tax
25
consequences of that thing or event for the relevant period are
different from what they would otherwise have been.
      (2)
This paragraph also applies if, in the case of any person—
(a)
a thing is done or an event occurs before 6 April 2009, and
(b)
because of a change in the law made by this Act, the income tax
30
consequences of that thing or event for the relevant period are
different from what they would otherwise have been.
      (3)
If the person mentioned in sub-paragraph (1) or (2) so elects, this Act applies
with such modifications as may be necessary to secure that the corporation
tax or (as the case may be) income tax consequences for the relevant period
35
are the same as they would have been if the change in the law had not been
made.
      (4)
In sub-paragraphs (1) to (3) “the relevant period” means—
(a)
for corporation tax purposes, any accounting period beginning
before and ending on or after 1 April 2009, and
40
(b)
for income tax purposes, any period of account beginning before and
ending on or after 6 April 2009.
      (5)
If this paragraph applies in the case of two or more persons in relation to the
same thing or event, an election made under this paragraph by any one of

Corporation Tax Bill
Schedule 2 — Transitionals and savings
Part 5 — Company residence: exceptions to section 14
743

those persons is of no effect unless a corresponding election is made by the
other or each of the others.
      (6)
An election under this paragraph must be made—
(a)
for corporation tax purposes, not later than two years after the end of
the accounting period, and
5
(b)
for income tax purposes, on or before the first anniversary of the
normal self-assessment filing date for the tax year in which the
period of account ends.
Part 3
Charge to corporation tax on income
10
Effect of repeal of section 9(1) of ICTA on relevance of case law
11
The repeal by this Act of section 9(1) of ICTA does not affect the relevance
for corporation tax purposes of any case law that was relevant for those
purposes immediately before the repeal.
Part 4
15
Accounting periods
Companies in administration
12
Section 10(1)(i) and (j), (2), (3) and (4) apply only in relation to companies
that enter administration (under the Insolvency Act 1986 (c. 45) or
otherwise) on or after 15 September 2003.
20
Part 5
Company residence: exceptions to section 14
13    (1)
Subject to sub-paragraph (2), section 14 does not apply to a company if—
(a)
immediately before 15 March 1988 the company was non-UK
resident, having ceased to be UK resident under a Treasury consent,
25
and
(b)
immediately before 1 April 2009 section 66(1) of FA 1988 did not
apply to the company because of paragraph 1(1) of Schedule 7 to that
Act (certain companies which ceased to be UK resident before 15
March 1988 in pursuance of a Treasury consent).
30
      (2)
If at any time a company falling within sub-paragraph (1)—
(a)
ceases to carry on business,
(b)
becomes UK resident, or
(c)
if the Treasury consent was a general consent, ceases to be taxable in
a territory outside the United Kingdom,
35

section 14 applies in relation to the company after that time.
14    (1)
Subject to sub-paragraph (2), section 14 does not apply to a company if
immediately before 1 April 2009 section 66(1) of FA 1988 did not apply to the
company because of paragraph 2(1) of Schedule 7 to that Act (certain
companies which ceased to be UK resident on or after 15 March 1988 in
40
pursuance of a Treasury consent).

Corporation Tax Bill
Schedule 2 — Transitionals and savings
Part 6 — Trading income
744

      (2)
If at any time a company falling within sub-paragraph (1)—
(a)
ceases to carry on business, or
(b)
becomes UK resident,

section 14 applies in relation to the company after that time.
15    (1)
In paragraph 13—
5
“general consent” means a consent under a section to which sub-
paragraph (2) applies which is given generally within the meaning of
subsection (4) of the section in question,
“taxable” means liable to tax on income by reason of domicile,
residence or place of management,
10
“Treasury consent” means a consent under a section to which sub-
paragraph (2) applies which is given for the purposes of subsection
(1)(a) of the section in question.
      (2)
This sub-paragraph applies to the following sections (restrictions on the
migration etc of companies)—
15
section 765 of ICTA,
section 482 of the Income and Corporation Taxes Act 1970,
section 468 of the Income Tax Act 1952, and
section 36 of FA 1951.
Part 6
20
Trading income
Hiring cars with low CO2 emissions before 1 April 2013
16
Section 58 does not apply to expenditure which is incurred on the hiring of
a car mentioned in that section which is first registered before 17 April 2002.
17
In relation to expenditure incurred on the hiring of a car—
25
(a)
for a period of hire which began before 1 April 2008, and
(b)
under a contract entered into before 1 April 2008,

section 58 (in which “car with low CO2 emissions” is defined by reference to
section 45D of CAA 2001) applies as if section 45D(4) of CAA 2001 had not
been amended by section 77 of FA 2008.
30
Tenants under taxed leases
18    (1)
This paragraph relates to the operation of sections 62 to 67 where, in respect
of a lease—
(a)
there is a receipt of a Schedule A business or an overseas property
business (within the meaning of section 65A(4) or 70A(4) of ICTA) as
35
a result of section 34 or 35 of ICTA (treatment of premiums etc as rent
and assignments for profit of lease granted at an undervalue) for a
tax year before the tax year 2005-06 or an accounting period ending
before 1 April 2009, or
(b)
there would be such a receipt, but for the operation of section 37(2)
40
or (3) of ICTA (reductions in certain receipts under section 34 or 35
of ICTA).

In this paragraph and paragraphs 19 and 20 a receipt falling within
paragraph (a) or (b) is referred to as an “ICTA pre-commencement receipt”.