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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

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