Finance Bill

House of Commons

Session 2008 - 09
Internet Publications
Other Bills before Parliament

Finance Bill

Finance Bill
Schedule 6 — Temporary extension of carry back of losses
88

Consequential repeals
6
In consequence of the amendments made by section 17 and this Schedule,
omit—
(a)
in FA 1995, section 15,
(b)
in FA 2000, in section 18—
5
(i)
subsections (1) to (5), and
(ii)
subsection (7),
(c)
in FA 2002, section 121, and
(d)
in FA 2007, section 12.
Commencement etc
10
7
The amendments made by paragraphs 2(3) and 6(a), (b)(i), (c) and (d) have
effect in relation to the carriage of passengers beginning on or after 1
November 2009.
8     (1)
No agreement for Chapter 4 of Part 1 of FA 1994 to have effect in relation to
a registered operator in accordance with a special accounting scheme
15
pursuant to section 39 of FA 1994 as substituted by paragraph 3 may be
made so as to have effect as respects the carriage of passengers beginning
before 1 November 2009.
      (2)
Nothing in this Schedule affects the continuing operation of, or of schemes
prepared under, that section as it has effect immediately before this Act is
20
passed as respects the carriage of passengers beginning before 1 November
2009.
Schedule 6
Section 23

Temporary extension of carry back of losses
Income tax
25
1     (1)
A person who has made a loss in a trade in the tax year 2008-09 or 2009-10
may make a claim for relief under this paragraph if—
(a)
relief is available to the person under section 64 of ITA 2007 (trade
loss relief against general income) in relation to an amount of the loss
(“the section 64 amount”), and
30
(b)
condition A or B is met.
      (2)
Condition A is that the person makes a claim under that section for relief in
respect of the section 64 amount—
(a)
where it is a loss made in the tax year 2008-09, for either or both of
the tax years 2007-08 and 2008-09, or
35
(b)
where it is a loss made in the tax year 2009-10, for either or both of
the tax years 2008-09 and 2009-10.
      (3)
Condition B is that—
(a)
where it is a loss made in the tax year 2008-09, for the tax years 2007-
08 and 2008-09, or
40

Finance Bill
Schedule 6 — Temporary extension of carry back of losses
89

(b)
where it is a loss made in the tax year 2009-10, for the tax years 2008-
09 and 2009-10,

the person’s total income is nil or does not include any income from which
a deduction could be made in pursuance of a claim under that section for
relief in respect of the section 64 amount.
5
      (4)
The amount of the loss that may be relieved under this paragraph (“the
deductible amount”) is—
(a)
in a case where condition A is met, so much of the section 64 amount
as cannot be relieved pursuant to the claim under section 64 of ITA
2007, and
10
(b)
in a case where condition B is met, the whole of the section 64
amount,

(but see sub-paragraph (12)).
      (5)
A claim for relief under this paragraph is for the deductible amount to be
deducted (in accordance with sub-paragraph (6) and with whichever is
15
applicable of sub-paragraphs (7), (8), (9) and (10))—
(a)
where it is a loss made in the tax year 2008-09, in either or both of the
following ways—
(i)
in computing the person’s total income for either or both of
the tax years 2005-06 and 2006-07 in accordance with section
20
835 of ICTA, and
(ii)
in calculating the person’s net income for the tax year 2007-08
in accordance with Step 2 of the calculation in section 23 of
ITA 2007 (which applies as if this paragraph were a provision
listed in section 24 of that Act), or
25
(b)
where it is a loss made in the tax year 2009-10, in either or both of the
following ways—
(i)
in computing the person’s total income for the tax year 2006-
07 in accordance with section 835 of ICTA, and
(ii)
in calculating the person’s net income for either or both of the
30
tax years 2007-08 and 2008-09 in accordance with Step 2 of the
calculation in section 23 of ITA 2007 (which applies as if this
paragraph were a provision listed in section 24 of that Act).
      (6)
A deduction is to be made only from profits of the trade (and accordingly, in
relation to the tax years 2007-08 and 2008-09, subsection (2) of section 25 of
35
ITA 2007 has effect as if this sub-paragraph were included in subsection (3)
of that section).
      (7)
This sub-paragraph explains how the deductions are to be made in a case
where the loss is made in the tax year 2008-09 and the person makes a claim
under section 64 of ITA 2007 for relief in respect of the section 64 amount for
40
the tax year 2007-08.

Step 1

Deduct the deductible amount from the profits of the trade for the tax year
2006-07.

Step 2
45

Deduct from the profits of the trade for the tax year 2005-06 so much of the
deductible amount as has not been deducted under Step 1.
      (8)
This sub-paragraph explains how the deductions are to be made in any other
case where the loss is made in the tax year 2008-09.

Finance Bill
Schedule 6 — Temporary extension of carry back of losses
90


Step 1

Deduct the deductible amount from the profits of the trade for the tax year
2007-08.

Step 2

Deduct from the profits of the trade for the tax year 2006-07 so much of the
5
deductible amount as has not been deducted under Step 1.

Step 3

Deduct from the profits of the trade for the tax year 2005-06 so much of the
deductible amount as has not been deducted under Step 1 or 2.
      (9)
This sub-paragraph explains how the deductions are to be made in a case
10
where the loss is made in the tax year 2009-10 and the person makes a claim
under section 64 of ITA 2007 for relief in respect of the section 64 amount for
the tax year 2008-09.

Step 1

Deduct the deductible amount from the profits of the trade for the tax year
15
2007-08.

Step 2

Deduct from the profits of the trade for the tax year 2006-07 so much of the
deductible amount as has not been deducted under Step 1.
     (10)
This sub-paragraph explains how the deductions are to be made in any other
20
case where the loss is made in the tax year 2009-10.

Step 1

Deduct the deductible amount from the profits of the trade for the tax year
2008-09.

Step 2
25

Deduct from the profits of the trade for the tax year 2007-08 so much of the
deductible amount as has not been deducted under Step 1.

Step 3

Deduct from the profits of the trade for the tax year 2006-07 so much of the
deductible amount as has not been deducted under Step 1 or 2.
30
     (11)
The provision made by the preceding provisions means that the following
sections of ITA 2007 apply in relation to relief under this paragraph as in
relation to relief under section 64 of that Act—
(a)
section 66 to 70 (restrictions on relief under section 64),
(b)
sections 74B to 74D (general restrictions on relief),
35
(c)
sections 75 to 79 (restrictions on relief under section 64 and early
trade losses relief in relation to capital allowances),
(d)
section 80 (restrictions on those reliefs in relation to ring fence
income), and
(e)
section 81 (restrictions on those reliefs in relation to dealings in
40
commodity futures).
     (12)
The total amount that may be deducted in accordance with sub-paragraph
(7), or in accordance with Steps 2 and 3 in sub-paragraph (8), is limited to
£50,000; and the total amount that may be deducted in accordance with sub-
paragraph (9), or in accordance with Steps 2 and 3 in sub-paragraph (10), is
45
also limited to £50,000.
2     (1)
A claim for relief under paragraph 1 must be made—

Finance Bill
Schedule 6 — Temporary extension of carry back of losses
91

(a)
where the relief is in respect of a loss made in the tax year 2008-09, on
or before the first anniversary of the normal self-assessment filing
date for that tax year, and
(b)
where the relief is in respect of a loss made in the tax year 2009-10, on
or before the first anniversary of the normal self-assessment filing
5
date for that tax year.
      (2)
Paragraph 1 applies to professions and vocations as it applies to trades.
      (3)
Paragraph 1 is subject to paragraph 2 of Schedule 1B to TMA 1970 (claims for
loss relief involving 2 or more years).
      (4)
Sections 61 to 63 of ITA 2007 (meaning of “making a loss in a tax year” etc
10
and prohibition against double counting) have effect as if paragraph 1 were
included in Chapter 2 of Part 4 of that Act.
      (5)
Subsections (1) to (3) of section 127 of that Act (UK furnished holiday lettings
business treated as trade) have effect as if paragraph 1 were included in Part
4 of that Act.
15
      (6)
The reference in paragraph 3(1) of Schedule 2 to the Social Security
Contributions and Benefits Act 1992 and Social Security Contributions and
Benefits (Northern Ireland) Act 1992 (levy of Class 4 contributions with
income tax) to section 64 of ITA 2007 includes paragraph 1.
Corporation tax
20
3     (1)
Section 393A of ICTA (losses: set off against profits of same or earlier
accounting period) has effect in relation to any loss to which this paragraph
applies as if, in subsection (2) of that section, “3 years” were substituted for
“twelve months” (but subject as follows).
      (2)
This paragraph applies to any loss incurred by a company in a trade in a
25
relevant accounting period (but subject to sub-paragraph (3)); and a relevant
accounting period is one ending after 23 November 2008 and before 24
November 2010.
      (3)
The maximum amount of loss to which this paragraph applies in the case of
any company is—
30
(a)
£50,000 in relation to losses incurred in relevant accounting periods
ending after 23 November 2008 and before 24 November 2009, and
(b)
£50,000 in relation to losses incurred in relevant accounting periods
ending after 23 November 2009 and before 24 November 2010;

and the overall limit or limits apply whether a loss is incurred by the
35
company in only one relevant accounting period or losses are so incurred in
more than one such period.
      (4)
Subject to that, if in the case of the company the length of a relevant
accounting period is less than one year, the maximum amount of the loss
incurred in that period that may be set off under section 393A of ICTA by
40
virtue of this paragraph is the relevant proportion of £50,000.


(5)  “The relevant proportion” is—

RAP
Y


where—
RAP is the number of days in the relevant accounting period, and

Finance Bill
Schedule 7 — Contaminated and derelict land
Part 1 — Amendments of Part 14 of CTA 2009
92

Y is 365.
      (6)
The reference in subsection (2C) of section 393A of ICTA to so much of the
loss referred to in that subsection not falling within subsection (2B) of that
section as does not exceed the amount of the allowance mentioned in
subsection (2C)(b) (“the subsection (2C) loss”) has effect in relation to a
5
relevant accounting period as a reference to so much of the subsection (2C)
loss as exceeds that which can be set off under section 393A of ICTA by
virtue of this paragraph.
Schedule 7
Section 26

Contaminated and derelict land
10
Part 1
Amendments of Part 14 of CTA 2009
1
Part 14 of CTA 2009 (remediation of contaminated land) is amended as
follows.
2
In the heading of the Part, after “contaminated” insert “or derelict”.
15
3     (1)
Section 1143 (overview of Part) is amended as follows.
      (2)
In subsection (1), after “contamination” insert “or dereliction”.
      (3)
In subsection (7), after “contaminated” insert “or derelict”.
4     (1)
Section 1144 (“qualifying land remediation expenditure”) is amended as
follows.
20
      (2)
In subsection (1), for “E” substitute “F”.
      (3)
In subsection (2), insert at the end “or a derelict state (see section 1145A)”.
      (4)
In subsection (3), after “contaminated” insert “or derelict”.
      (5)
For subsection (4) substitute—
“(4)
Condition C is that it is—
25
(a)
in the case of land in a contaminated state, expenditure on
relevant contaminated land remediation undertaken by the
company (see section 1146), or
(b)
in the case of land in a derelict state, expenditure on relevant
derelict land remediation so undertaken (see section 1146A).”
30
      (6)
In subsection (5), for paragraph (c) (and the “or” before it) substitute—
“(c)
incurred in respect of relevant land remediation contracted
out by the company to another person with whom the
company is not connected, or
(d)
qualifying expenditure on connected sub-contracted land
35
remediation (see section 1175).”
      (7)
After subsection (6) insert—
“(6A)
Condition F is that the expenditure is not incurred on landfill tax.”

Finance Bill
Schedule 7 — Contaminated and derelict land
Part 1 — Amendments of Part 14 of CTA 2009
93

5
For section 1145 substitute—
“1145
Land “in a contaminated state”
(1)
For the purposes of this Part land is in a contaminated state if (and
only if), because of something in, on or under the land, the land is in
a condition such that—
5
(a)
relevant harm is being caused, or
(b)
there is a serious possibility that relevant harm will be
caused.
(2)
But land is not in a contaminated state by reason of the presence in,
on or under it of—
10
(a)
living organisms or decaying matter deriving from living
organisms, air or water, or
(b)
anything present otherwise than as a result of industrial
activity.
(3)
The Treasury may by order specify circumstances in which
15
subsection (2) is not to apply to the extent specified in the order; and
an order under this subsection may contain incidental,
supplemental, consequential and transitional provision and savings.
(4)
In this section “relevant harm” means—
(a)
death of living organisms or significant injury or damage to
20
living organisms,
(b)
significant pollution of controlled waters,
(c)
a significant adverse impact on the ecosystem, or
(d)
structural or other significant damage to buildings or other
structures or interference with buildings or other structures
25
that significantly compromises their use.
1145A
Land “in a derelict state”
For the purposes of this Part land is in a derelict state if (and only if)
the land—
(a)
is not in productive use, and
30
(b)
cannot be put into productive use without the removal of
buildings or other structures.
1145B
Exclusion of nuclear sites
(1)
A nuclear site is not land in a contaminated state or land in a derelict
state for the purposes of this Part.
35
(2)
“Nuclear site” means—
(a)
any site in respect of which a nuclear site licence is for the
time being in force, or
(b)
any site in respect of which, after the revocation or surrender
of a nuclear site licence, the period of responsibility of the
40
licensee has not yet come to an end.
(3)
In subsection (2) “nuclear site licence”, “licensee” and “period of
responsibility” have the same meaning as in the Nuclear Installations
Act 1965.”
6     (1)
Section 1146 (“relevant land remediation”) is amended as follows.
45

Finance Bill
Schedule 7 — Contaminated and derelict land
Part 1 — Amendments of Part 14 of CTA 2009
94

      (2)
In subsection (1)—
(a)
for “land remediation”, in relation to land” substitute “contaminated
land remediation”, in relation to land which is in a contaminated
state and in which a major interest has been”, and
(b)
for “and B” substitute “to C”.
5
      (3)
In subsection (3)—
(a)
in paragraph (a), for “harm, or any pollution of controlled waters,”
substitute “relevant harm”, and
(b)
omit paragraph (b) (and the “or” before it).
      (4)
After that subsection insert—
10
“(3A)
Condition C is that the activities are not—
(a)
activities of a description specified by order made by the
Treasury, or
(b)
activities required by or by virtue of any enactment specified
by such an order.
15
(3B)
An order under subsection (3A) may contain incidental,
supplemental, consequential and transitional provision and
savings.”
      (5)
In subsection (5), for the words after “(and only if)” substitute “because of
something in, on or under the land by virtue of which it is contaminated
20
land, the land is in a condition such that—
(a)
significant pollution of those waters is being caused, or
(b)
there is a serious possibility that significant pollution of those
waters will be caused.”
      (6)
In the heading, after “relevant” insert “contaminated”.
25
7
After that section insert—
“1146A
“Relevant derelict land remediation”
(1)
For the purposes of this Part “relevant derelict land remediation”, in
relation to land which is in a derelict state and in which a major
interest has been acquired by a company, means—
30
(a)
activities in relation to which conditions A and B are met, and
(b)
if there are such activities, relevant preparatory activity.
(2)
Condition A is that the activities comprise the doing of any works,
the carrying out of any operations or the taking of any steps in
relation to the land in question.
35
(3)
Condition B is that the purpose of the activities is a purpose specified
by order made by the Treasury.
(4)
An order under subsection (3) may contain incidental, supplemental,
consequential and transitional provision and savings.
(5)
For the purposes of subsection (1)(b) “relevant preparatory activity”
40
has the same meaning as for the purposes of subsection (1)(b) of
section 1146 (see subsection (4) of that section, but reading the
reference to subsection (1)(a) of that section as a reference to
subsection (1)(a) of this section).”