House of Commons portcullis
House of Commons
Session 2008 - 09
Internet Publications
Other Bills before Parliament

Corporation Tax Bill


Corporation Tax Bill

xxxvi

 

Chapter 4

Realisation of intangible fixed assets

733   

Overview of Chapter

734   

Meaning of “realisation”

735   

Asset written down for tax purposes

736   

Asset shown in balance sheet and not written down for tax purposes

737   

Apportionment in case of part realisation

738   

Asset not shown in balance sheet

739   

Meaning of “proceeds of realisation”

740   

Abortive expenditure on realisation

741   

Meaning of “chargeable intangible asset” and “chargeable realisation gain”

Chapter 5

Calculation of tax written-down value

742   

Asset written down on accounting basis

743   

Asset written down at fixed rate

744   

Effect of part realisation of asset

Chapter 6

How credits and debits are given effect

Introductory

745   

Introduction

746   

“Non-trading credits” and “non-trading debits”

Trading etc credits and debits

747   

Assets held for purposes of trade

748   

Assets held for purposes of property business

749   

Assets held for purposes of mines, transport undertakings, etc

750   

Assets held for purposes falling within more than one section

Non-trading credits and debits

751   

Non-trading gains and losses

752   

Charge to tax on non-trading gains on intangible fixed assets

753   

Treatment of non-trading losses

Chapter 7

Roll-over relief in case of realisation and reinvestment

When the relief is given

754   

The relief: the “old asset” and “other assets”

755   

Conditions relating to the old asset and its realisation

756   

Conditions relating to expenditure on other assets

757   

Claim for relief

 
 

Corporation Tax Bill

xxxvii

 

How the relief is given

758   

How the relief is given: general

759   

Determination of appropriate proportion of cost and adjusted cost

760   

References to cost of asset where asset affected by change of accounting policy

761   

Declaration of provisional entitlement to relief

762   

Realisation and reacquisition

763   

Disregard of deemed realisations and reacquisitions

Chapter 8

Groups of companies: introduction

Introductory

764   

Meaning of “company”, “group” and “subsidiary”

Rules

765   

General rule: a company and its 75% subsidiaries form a group

766   

Only effective 51% subsidiaries of principal company to be members of group

767   

Principal company cannot be 75% subsidiary of another company

768   

Company cannot be member of more than one group

769   

Continuity of identity of group

770   

Continuity where group includes an SE

771   

Meaning of “effective 51% subsidiary”

772   

Equity holders and profits or assets available for distribution

773   

Supplementary provisions

Chapter 9

Application of this Part to groups of companies

Introductory

774   

Overview of Chapter

Transfers within a group treated as tax-neutral

775   

Transfers within a group

776   

Meaning of “tax-neutral” transfer

Roll-over relief under Chapter 7 (realisation and reinvestment)

777   

Relief on realisation and reinvestment: application to group member

778   

Relief on reinvestment: acquisition of group company: introduction

779   

Rules that apply to cases within section 778(1)

Company ceasing to be member of group

780   

Deemed realisation and reacquisition at market value

781   

Character of credits and debits brought into account as a result of section 780

782   

Certain transferees of businesses etc not treated as leaving group

783   

Associated companies leaving group at the same time

784   

Groups with a relevant connection

 
 

Corporation Tax Bill

xxxviii

 

785   

Principal company becoming member of another group

786   

Character of credits and debits brought into account as a result of section 785

787   

Company ceasing to be member of group because of exempt distribution

788   

Provisions supplementing sections 780 to 787

789   

Merger carried out for genuine commercial reasons

790   

Provisions supplementing section 789

791   

Application of roll-over relief in relation to degrouping charge

Reallocation of degrouping charge within group and recovery

792   

Reallocation of charge within group

793   

Further requirements about elections under section 792

794   

Application of roll-over relief in relation to reallocated charge

795   

Recovery of charge from another group company or controlling director

796   

Interpretation of section 795

797   

Recovery under section 795: procedure etc

798   

Recovery under section 795: time limit

Disregard of payments between group members for reliefs

799   

Disregard of payments between group members for reliefs

Chapter 10

Excluded assets

Introductory

800   

Introduction

801   

Right to dispose of or acquire excluded asset also excluded

802   

Effect of partial exclusion

Assets wholly excluded from this Part

803   

Non-commercial purposes etc

804   

Assets for which capital allowances previously made

805   

Rights over tangible assets

806   

Financial assets

807   

Rights in companies, trusts etc

808   

Assets representing production expenditure on films

809   

Oil licences

Assets excluded from this Part except as respects royalties

810   

Mutual trade or business

811   

Sound recordings

812   

Master versions of films

813   

Computer software treated as part of cost of related hardware

Assets excluded from this Part to the extent specified

814   

Research and development

815   

Election to exclude capital expenditure on software

816   

Further provision about elections under section 815

 
 

Corporation Tax Bill

xxxix

 

Chapter 11

Transfer of business or trade

Introduction

817   

Overview of Chapter

Tax-neutral transfers

818   

Company reconstruction involving transfer of business

819   

European cross-border transfers of business: introduction

820   

Transfer of assets on European cross-border transfer of business

821   

European cross-border mergers: introduction

822   

Transfer of assets on European cross-border merger

823   

Interpretation of sections 821 and 822

824   

Transfer of business of building society to company

825   

Application of sections 780 and 785 where transfer within section 824 occurs

826   

Amalgamation of, or transfer of engagements by, certain societies

Transfer of assets to non-UK resident company

827   

Claims to postpone charge on transfer

828   

Relief on transfer

829   

Charge on subsequent realisations

830   

Exclusion from section 829 of group transfers

The genuine commercial transaction requirement and clearance

831   

The genuine commercial transaction requirement and clearance

832   

Procedure on application for clearance

833   

Decision on application for clearance

Chapter 12

Related parties

Introductory

834   

Overview of Chapter

Meaning of “related party", “control” and “major interest”

835   

“Related party”

836   

“Control”

837   

“Major interest”

Rights and powers to be taken into account

838   

General rule

839   

Rights and powers held jointly

840   

Partnerships

 
 

Corporation Tax Bill

xl

 

Meaning of “participator” and “associate”

841   

“Participator” and “associate”

Connected persons

842   

Introduction

843   

Who are connected persons

Chapter 13

Transactions between related parties

Introductory

844   

Overview of Chapter

Transfers treated as being at market value

845   

Transfer between company and related party treated as at market value

846   

Transfers not at arm’s length

847   

Transfers involving other taxes

848   

Tax-neutral transfers

849   

Transfers involving gifts of business assets

Other rules

850   

Part realisation involving related party acquisition: exclusion of roll-over

relief

851   

Delayed payment of royalty by company to related party

Chapter 14

Miscellaneous provisions

Grants and other contributions to expenditure

852   

Treatment of grants and other contributions to expenditure

853   

Grants to be left out of account for tax purposes

Finance leasing

854   

Finance leasing etc

855   

Further provision about regulations under section 854

Values to be used in special cases

856   

Assets acquired or realised together

857   

Deemed market value acquisition: adjustment where nil accounting value

Fungible assets

858   

Fungible assets

 
 

Corporation Tax Bill

xli

 

Assets ceasing to be or becoming chargeable intangible assets

859   

Asset ceasing to be chargeable intangible asset: deemed realisation at market

value

860   

Asset ceasing to be chargeable intangible asset: postponement of gain

861   

Treatment of postponed gain on subsequent realisation

862   

Treatment of postponed gain in other cases

863   

Asset becoming chargeable intangible asset

Matters to be ignored

864   

Tax avoidance arrangements to be ignored

865   

Debits for expenditure not generally deductible for tax purposes

Delayed payments and bad debts

866   

Delayed payment of employees’ remuneration

867   

Provisions supplementing section 866

868   

Delayed payment of pension contributions

869   

Bad debts etc

Controlled foreign companies

870   

Assumptions for calculating chargeable profits

Chapter 15

Adjustments on change of accounting policy

Introductory

871   

Introduction to Chapter

Change of policy involving change of value

872   

Adjustments in respect of change

873   

Effect of application of section 872 in later period and subsequently

Change of policy involving disaggregation

874   

Original asset not subject to fixed-rate writing down

875   

Effect of application of section 874 in later period and subsequently

876   

Original asset subject to fixed-rate writing down

877   

Election for fixed-rate writing down in relation to resulting asset

Supplementary

878   

Exclusion of credits or debits brought into account under other provisions

879   

Subsequent events affecting asset subject to adjustment under this Chapter

 
 

Corporation Tax Bill

xlii

 

Chapter 16

Pre-FA 2002 assets etc

Introduction

880   

Overview of Chapter

881   

Meaning of “pre-FA 2002 assets”

General rule

882   

Application of this Part to assets created or acquired on or after 1 April 2002

When assets are treated as created or acquired

883   

Assets treated as created or acquired when expenditure incurred

884   

Internally-generated goodwill: time of creation

885   

Certain other internally-generated assets: time of creation

886   

Assets representing production expenditure on films: time of creation

When expenditure treated as incurred

887   

General rule

888   

Cases where chargeable gains rule applies

889   

Cases where capital allowances general rule applies

Fungible assets

890   

Fungible assets: application of section 858

891   

Realisation and acquisition of fungible assets

Assets treated as pre-FA 2002 assets

892   

Certain assets acquired on transfer of business

893   

Assets whose value derives from pre-FA 2002 assets

894   

The preserved status conditions etc

895   

Assets acquired in connection with disposals of pre-FA 2002 assets

Application of Part to royalties and telecommunication rights

896   

Application to royalties

897   

Application to pre-FA 2002 assets consisting of telecommunication rights

Roll-over relief for disposals of pre-FA 2002 assets

898   

Relief where assets disposed of on or after 1 April 2002

899   

Relief where degrouping charge on asset arises on or after 1 April 2002

900   

Meaning of “chargeable asset within TCGA” in sections 898 and 899

 
 

 
previous section contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 2009
Revised 6 February 2009