Corporation Tax Bill

House of Commons

Session 2009 - 10
Internet Publications
Other Bills before Parliament

Corporation Tax Bill

Corporation Tax Bill
Part 7 — Community investment tax relief
Chapter 6 — Supplementary and general
132

Manner of withdrawal or reduction
255
Manner of withdrawal or reduction of CITR
(1)
This section applies if any CITR has been obtained which falls to be withdrawn
or reduced under this Chapter.
(2)
The CITR must be withdrawn or reduced by making an assessment to
5
corporation tax for the accounting period for which the CITR was obtained.
(3)
An assessment under subsection (2) may be made at any time not more than 6
years after the end of the accounting period for which the CITR was obtained.
(4)
Subsection (3) is not to be taken to limit the application of paragraph 46(2A) of
Schedule 18 to the Finance Act 1998 (loss of tax brought about deliberately).
10
Chapter 6
Supplementary and general
Alternative finance arrangements
256
Meaning of “loan” and “interest”
(1)
In this Part—
15
(a)
references to a “loan” include references to alternative finance
arrangements, and
(b)
references to “interest” include references to alternative finance return.
(2)
In subsection (1)—
“alternative finance arrangements” means arrangements to which any of
20
the following applies—
(a)
section 503 of CTA 2009 (purchase and resale arrangements),
(b)
section 505 of that Act (deposit arrangements),
(c)
section 506 of that Act (profit share agency arrangements), and
“alternative finance return” has the meaning given by section 511 and
25
513(1) and (2) of that Act.
(3)
Subsection (1) needs to be read with—
(a)
section 257, in the case of arrangements to which section 503 of CTA
2009 applies,
(b)
section 258, in the case of arrangements to which section 505 of that Act
30
applies, and
(c)
section 259, in the case of arrangements to which section 506 of that Act
applies.
257
Purchase and resale arrangements
(1)
This section applies if, under arrangements to which section 503 of CTA 2009
35
applies, a person (“the first purchaser”) purchases an asset that is sold to
another person (“the second purchaser”).
(2)
This Part has effect in relation to the arrangements in accordance with
subsections (3) to (9).

Corporation Tax Bill
Part 7 — Community investment tax relief
Chapter 6 — Supplementary and general
133

(3)
The first purchaser is treated as making a loan to the second purchaser.
(4)
The amount of the loan is treated as being equal to the first purchase price.
(5)
If the arrangements provide that the first purchaser will transfer ownership of
the asset to the second purchaser in instalments—
(a)
references to the loan being drawn down over a period of time include
5
references to the asset being transferred to the second purchaser in
instalments,
(b)
references to the date on which the first amount of the loan is drawn
down include references to the date on which the first instalment is
transferred to the second purchaser, and
10
(c)
references to the amount drawn down at a given date include
references to the value of the instalments transferred at that date.
(6)
In calculating the amount of capital outstanding on the loan, each payment of
the second purchase price (or part of the second purchase price), as reduced by
any amount of alternative finance return (within the meaning of Chapter 6 of
15
Part 6 of CTA 2009) included within each payment, is treated as repayment of
the loan capital.
(7)
References to the beneficial owner of the loan include references to the person
beneficially entitled to payment of the second purchase price.
(8)
References to the disposal of the whole or any part of the loan include
20
references to the disposal of the right to receive payment of the whole or any
part of the outstanding second purchase price.
(9)
If arrangements to which section 503 of CTA 2009 applies are, by virtue of this
section, qualifying investments under Chapter 2 of this Part, paragraph (f) of
section 249(1) above is to be ignored in relation to the arrangements concerned.
25
(10)
In this section “the first purchase price” and “the second purchase price” have
the same meaning as in section 503 of CTA 2009.
258
Deposit arrangements
(1)
This section applies if, under arrangements to which section 505 of CTA 2009
applies, a person (“the depositor”) deposits money with a financial institution.
30
(2)
This Part has effect in relation to the arrangements in accordance with
subsections (3) to (9).
(3)
The depositor is treated as making a loan to the financial institution.
(4)
The amount of the loan is treated as being equal to the money deposited under
the arrangements.
35
(5)
If the arrangements provide that the depositor will deposit a sum of money
with the financial institution in instalments—
(a)
references to the loan being drawn down over a period of time include
references to the depositor depositing a sum of money with the
financial institution in instalments,
40
(b)
references to the date on which the first amount of the loan is drawn
down include references to the date on which the first instalment is
deposited with the financial institution, and

Corporation Tax Bill
Part 7 — Community investment tax relief
Chapter 6 — Supplementary and general
134

(c)
references to the amount drawn down at a given date include
references to the value of the instalments deposited with the financial
institution at that date.
(6)
The capital outstanding on the loan is treated as being equal to the balance of
the repayable deposit.
5
(7)
References to any repayment of the loan include references to any repayment
of the deposit.
(8)
References to the beneficial owner of the loan include references to the person
beneficially entitled to repayment of the deposit.
(9)
References to the disposal of the whole or any part of the loan include
10
references to the disposal of the right to receive repayment of the whole or any
part of the deposit.
(10)
In this section “financial institution” has the same meaning as in Chapter 6 of
Part 6 of CTA 2009 (see section 502 of that Act).
259
Profit share agency arrangements
15
(1)
This section applies if, under arrangements to which section 506 of CTA 2009
applies, a person (“the principal”) appoints a financial institution as agent.
(2)
This Part has effect in relation to the arrangements in accordance with
subsections (3) to (9).
(3)
The principal is treated as making a loan to the agent.
20
(4)
The amount of the loan is treated as being equal to the money provided by the
principal to the agent under the arrangements.
(5)
If the arrangements provide that the principal will provide a sum of money to
the agent in instalments—
(a)
references to the loan being drawn down over a period of time include
25
references to the principal providing a sum of money to the agent in
instalments,
(b)
references to the date on which the first amount of the loan is drawn
down include references to the date on which the first instalment is
provided to the agent, and
30
(c)
references to the amount drawn down at a given date include
references to the value of the instalments provided to the agent at that
date.
(6)
The capital outstanding on the loan is treated as being equal to the balance of
the repayable money provided to the agent.
35
(7)
References to any repayment of the loan include references to any repayment
of the money provided to the agent.
(8)
References to the beneficial owner of the loan include references to the person
beneficially entitled to repayment of the money provided to the agent.
(9)
References to the disposal of the whole or any part of the loan include
40
references to the disposal of the right to receive repayment of the whole or any
part of the money provided to the agent.

Corporation Tax Bill
Part 7 — Community investment tax relief
Chapter 6 — Supplementary and general
135

(10)
In subsection (1) “financial institution” has the same meaning as in Chapter 6
of Part 6 of CTA 2009 (see section 502 of that Act).
Miscellaneous
260
Information to be provided by the investor
(1)
If—
5
(a)
the investor has obtained CITR in respect of the investment, and
(b)
an event occurs because of which CITR attributable to the investment
in respect of any accounting period falls to be withdrawn or reduced by
virtue of section 243, 244, 245 or 247,

the investor must give an officer of Revenue and Customs a notice containing
10
particulars of the event.
(2)
Subject to subsection (3), a notice under subsection (1) must be given not later
than the end of the period of 12 months beginning with the end of the
accounting period in which the event occurred.
(3)
If—
15
(a)
the investor is required to give a notice as a result of the receipt of value
by a person connected with the investor (see section 253), and
(b)
the end of the period of 60 days beginning when the investor comes to
know of that event is later than the final notice date under subsection
(2),
20

the notice must be given before the end of that 60 day period.
261
Disclosure
(1)
No obligation as to secrecy or other restriction on the disclosure of information
imposed by statute or otherwise prevents the disclosure of information—
(a)
by the Secretary of State to an officer of Revenue and Customs for the
25
purpose of assisting Her Majesty’s Revenue and Customs to discharge
their functions under the Corporation Tax Acts so far as relating to
matters arising under this Part, or
(b)
by an officer of Revenue and Customs to the Secretary of State for the
purpose of assisting the Secretary of State to discharge the Secretary of
30
State’s functions in connection with this Part.
(2)
Information obtained by such disclosure is not to be further disclosed except
for the purposes of legal proceedings arising out of the functions referred to.
262
Nominees
(1)
For the purposes of this Part—
35
(a)
loans made by or to, or disposed of by, a nominee for a person are
treated as made by or to, or disposed of by, that person, and
(b)
securities or shares subscribed for by, issued to, acquired or held by or
disposed of by a nominee for a person are treated as subscribed for by,
issued to, acquired or held by or disposed of by that person.
40
(2)
For the purposes of subsection (1) references to things done by or to a nominee
for a person include things done by or to a bare trustee for a person.