|
| |
|
| |
| An interest in land, other than an interest held as security for a debt. |
| |
| |
| Any of the following issued by Her Majesty’s Government in the United |
| |
| 5 |
| |
(b) | Certificates of Tax Deposit, |
| |
(c) | Savings Certificates, and |
| |
(d) | Tax Reserve Certificates. |
| |
| 10 |
| Northern Ireland Treasury Bills. |
| |
| |
| Units in a unit trust scheme (as defined in section 237(1) of FISMA 2000) or in |
| |
a recognised scheme (as defined in section 237(3) of FISMA 2000). |
| |
| “Units” is defined in section 237(2) of FISMA 2000. |
| 15 |
| |
| A deposit with a bank (as defined in section 1120)— |
| |
(a) | in respect of which interest is payable at a commercial rate, and |
| |
(b) | which is not made as part of an arrangement under which a loan is |
| |
made by the bank to some other person. |
| 20 |
| |
| |
(a) | the National Savings Bank, |
| |
(b) | a building society, or |
| |
(c) | a credit institution which operates on mutual principles and which is |
| 25 |
authorised by an appropriate governmental body in the territory in |
| |
which the deposit is taken. |
| |
| |
| Certificates of deposit (including uncertificated eligible debt security units as |
| |
defined in section 986(3) of ITA 2007). |
| 30 |
| |
| A loan or other investment as to which an officer of Revenue and Customs is |
| |
satisfied, on a claim, that it is made for the benefit of the charitable company |
| |
and not for the avoidance of tax (whether by the company or any other person). |
| |
512 | Securities which are approved charitable investments |
| 35 |
(1) | The investments to which this section applies are investments in securities— |
| |
(a) | issued or guaranteed by the government of a member State of the |
| |
| |
(b) | issued or guaranteed by the government or a governmental body of |
| |
any territory or part of a territory, |
| 40 |
(c) | issued by an international entity listed in the Annex to Council |
| |
Directive 2003/48/EC (directive on taxation of interest payments), |
| |
|
| |
|
| |
|
(d) | issued by an entity meeting the four criteria set out at the end of that |
| |
| |
(e) | issued by a building society, |
| |
(f) | issued by a credit institution which operates on mutual principles and |
| |
which is authorised by an appropriate governmental body in the |
| 5 |
territory in which the securities are issued, |
| |
(g) | issued by an open-ended investment company, |
| |
(h) | issued by a company and listed on a recognised stock exchange, or |
| |
(i) | issued by a company but not listed on a recognised stock exchange. |
| |
(2) | Subsection (1) is subject to section 513. |
| 10 |
(3) | In this section and in section 513— |
| |
| |
(a) | debenture stock and bonds (whether constituting a charge on |
| |
| |
| 15 |
“open-ended investment company” is to be read in accordance with |
| |
| |
“securities” includes shares and debentures, and |
| |
“shares” includes stocks. |
| |
513 | Conditions to be met for some securities |
| 20 |
(1) | Section 512 does not apply to an investment by virtue of subsection (1)(b), (c) |
| |
or (d) of that section unless— |
| |
(a) | condition A is met in relation to the securities, and |
| |
(b) | if the securities are shares or debenture stock, condition B is met in |
| |
relation to the securities. |
| 25 |
| But see subsection (3) of this section. |
| |
(2) | In the case of an investment in securities issued by a company which is |
| |
incorporated, section 512 does not apply to the investment by virtue of |
| |
subsection (1)(i) of that section unless— |
| |
(a) | condition A is met in relation to the securities, |
| 30 |
(b) | if the securities are shares or debenture stock, condition B is met in |
| |
relation to the securities, and |
| |
(c) | condition C is met in relation to the company. |
| |
| But see subsection (3) of this section. |
| |
(3) | Conditions A and B need not be met if the securities are traded or quoted on a |
| 35 |
money market supervised by the government or a governmental body of any |
| |
territory or part of a territory. |
| |
(4) | Condition A is that the securities are traded or quoted on— |
| |
(a) | a recognised investment exchange (as defined in section 285(1) of |
| |
| 40 |
(b) | an investment exchange which constitutes the principal or only market |
| |
established in a territory on which securities admitted to official listing |
| |
| |
| |
(a) | the securities are fully paid up, |
| 45 |
|
| |
|
| |
|
(b) | the terms of the issue of the securities require them to be fully paid up |
| |
within the period of 9 months beginning with the day after the day on |
| |
which they are issued, or |
| |
(c) | the securities are shares issued with no nominal value. |
| |
| 5 |
(a) | throughout the last business day before the investment day, the |
| |
company has total issued and paid up share capital of at least |
| |
£1,000,000 (or the equivalent of £1,000,000 in some other currency), and |
| |
(b) | in each of the 5 years immediately before the calendar year in which the |
| |
investment day falls, the company paid a dividend on all the shares |
| 10 |
issued by the company (excluding any shares issued after the dividend |
| |
was declared and any shares which by their terms of issue did not rank |
| |
for dividend for that year). |
| |
(7) | For the purposes of the words in brackets in subsection (6)(a) use the exchange |
| |
rate prevailing in the United Kingdom at the close of business on the last |
| 15 |
business day before the investment day. |
| |
(8) | For the purposes of subsection (6)(b) a company formed— |
| |
(a) | to take over the business of another company or other companies, or |
| |
(b) | to acquire the securities of, or control of, another company or other |
| |
| 20 |
| is treated as having paid a dividend in any year in which a dividend has been |
| |
paid by the other company or all of the other companies (as the case may be). |
| |
(9) | It is irrelevant that the company is formed for other purposes in addition to |
| |
those mentioned in paragraph (a) or (b) of subsection (8). |
| |
| 25 |
“business day” means, in relation to an investment, a business day in the |
| |
place where the investment is made, and |
| |
“the investment day” means, in relation to an investment, the day on |
| |
which the investment is made. |
| |
514 | Approved charitable loans |
| 30 |
(1) | A loan is an approved charitable loan for the purposes of section 496 (meaning |
| |
of “non-charitable expenditure”) if it meets conditions A and B. |
| |
(2) | Condition A is that the loan is not made by way of investment. |
| |
(3) | Condition B is that either— |
| |
(a) | the loan is made to another charity for charitable purposes only, |
| 35 |
(b) | it is made to a beneficiary of the charitable company in the course of |
| |
carrying out the purposes of the charitable company, |
| |
(c) | it consists of money placed on current account with a bank otherwise |
| |
than as part of an arrangement under which a loan is made by a bank |
| |
| 40 |
(d) | an officer of Revenue and Customs is satisfied, on a claim, that the loan |
| |
is made for the benefit of the charitable company and not for the |
| |
avoidance of tax (whether by the charitable company or by some other |
| |
| |
(4) | In this section “bank” has the meaning given by section 1120. |
| 45 |
|
| |
|
| |
|
Carry back of excess non-charitable expenditure |
| |
515 | Excess expenditure treated as non-charitable expenditure of earlier periods |
| |
(1) | This section applies if a charitable company’s non-charitable expenditure for |
| |
an accounting period exceeds its available income and gains for the period. |
| |
(2) | The excess is the charitable company’s “excess expenditure” for the accounting |
| 5 |
| |
(3) | The charitable company’s excess expenditure for the accounting period is |
| |
treated for the purposes of this Part as non-charitable expenditure for earlier |
| |
accounting periods so far as it can be attributed to earlier accounting periods |
| |
| 10 |
(4) | For the purposes of this Part a charitable company’s “available income and |
| |
gains” for an accounting period is the sum of— |
| |
(a) | the amount in respect of which the charitable company is chargeable |
| |
for the period under the charge to corporation tax on income after |
| |
giving effect to any exemption under this Part, |
| 15 |
(b) | any chargeable gains accruing to the charitable company in the period, |
| |
(c) | the charitable company’s attributable income and gains for the period |
| |
| |
(d) | any non-taxable sums received by the charitable company in the |
| |
| 20 |
(5) | In subsection (4) “non-taxable sums” means donations, legacies and other |
| |
sums of a similar nature which, ignoring exemptions from corporation tax |
| |
under this Part and under section 256 of TCGA 1992, are not liable to |
| |
| |
(6) | Any restrictions on the exemptions under this Part which result from sections |
| 25 |
492(2) and 494 are to be ignored in calculating the amount mentioned in |
| |
| |
(7) | Any restriction on the exemption under section 256(1) of TCGA 1992 which |
| |
results from section 256(4) of that Act is to be ignored in calculating the amount |
| |
of any chargeable gains to be taken into account in accordance with subsection |
| 30 |
| |
516 | Rules for attributing excess expenditure to earlier periods |
| |
(1) | The rules in this section apply for attributing a charitable company’s excess |
| |
expenditure for an accounting period to earlier accounting periods under |
| |
| 35 |
(2) | The excess expenditure for an accounting period may be attributed to an earlier |
| |
| |
(a) | the earlier period ends not more than 6 years before the end of the |
| |
| |
(b) | the charitable company’s available income and gains for the earlier |
| 40 |
period exceed its non-charitable expenditure for the earlier period. |
| |
(3) | If the conditions in subsection (2) are met in the case of more than one earlier |
| |
accounting period, the excess expenditure is to be attributed to a later |
| |
accounting period in priority to an earlier accounting period. |
| |
|
| |
|
| |
|
(4) | The amount of excess expenditure that is to be attributed to an earlier |
| |
accounting period must not be greater than the amount by which the charitable |
| |
company’s available income and gains for the earlier period exceed its non- |
| |
charitable expenditure for the earlier period. |
| |
(5) | For the purposes of subsections (2)(b) and (4) the charitable company’s non- |
| 5 |
charitable expenditure for the earlier accounting period includes any excess |
| |
expenditure attributed to the earlier period as a result of a previous operation |
| |
of this section, but ignores the attribution in question. |
| |
517 | Adjustments in consequence of section 515 |
| |
Such adjustments must be made (whether by way of the making of |
| 10 |
assessments or otherwise) as may be required in consequence of section 515. |
| |
| |
Real Estate Investment Trusts |
| |
| |
| 15 |
| |
| |
| |
(a) | enables a group of companies which carries on property rental business |
| |
and which meets requirements specified in Chapter 2 to opt to benefit |
| 20 |
from exemptions from corporation tax on profits and gains in |
| |
accordance with Chapter 3, and |
| |
(b) | imposes liabilities to tax on members of the group and the recipients of |
| |
distributions made by the principal company of the group. |
| |
(2) | This Part makes corresponding provision in relation to a company which |
| 25 |
carries on property rental business and which meets requirements specified in |
| |
| |
| |
(a) | Chapter 4 deals with some of the consequences of becoming, or |
| |
becoming a member of, a UK REIT, |
| 30 |
(b) | Chapters 5, 6 and 7 contain provision relating to (respectively) assets of, |
| |
distributions made by, and gains arising to a UK REIT, |
| |
(c) | Chapter 8 contains provision about failure to meet requirements |
| |
| |
(d) | Chapter 9 contains provision about ceasing to be, or to be a member of, |
| 35 |
| |
(e) | Chapter 10 provides for the application of this Part in relation to |
| |
property rental business carried on by way of a joint venture, and |
| |
(f) | Chapter 11 contains miscellaneous provision and definitions. |
| |
(4) | In this Part “UK REIT” means— |
| 40 |
(a) | a group UK REIT (see section 523(5)), or |
| |
|
| |
|
| |
|
(b) | a company UK REIT (see section 524(5)). |
| |
| |
519 | “Property rental business” |
| |
(1) | In this Part “property rental business” means— |
| |
(a) | UK property business (within the meaning given by section 205 of CTA |
| 5 |
| |
(b) | overseas property business (within the meaning given by section 206 of |
| |
| |
(2) | For the purposes of subsection (1) ignore the effect of section 42(2) of CTA 2009 |
| |
(which provides for receipts and expenses in connection with tied premises to |
| 10 |
be treated as part of a trade and not as part of a property business). |
| |
(3) | The definition of “property rental business” is subject to— |
| |
(a) | section 604 (which provides that business of a specified class is not |
| |
property rental business), and |
| |
(b) | section 605 (which provides that business giving rise to income of a |
| 15 |
specified class is not property rental business). |
| |
(4) | Business carried on by a non-UK company which is a member of a group is |
| |
property rental business for the purposes of this Part if the business would be |
| |
property rental business if carried on by a UK company. |
| |
520 | “UK property rental business” of non-UK companies |
| 20 |
(1) | In this Part references to “UK property rental business”, in relation to a non-UK |
| |
company, are to the company’s property rental business in the United |
| |
| |
(2) | Subsection (3) applies if— |
| |
(a) | a non-UK company which is a member of a group UK REIT has UK |
| 25 |
property rental business, and |
| |
(b) | the profits of that business would be chargeable to income tax under |
| |
Chapter 3 of Part 3 of ITTOIA 2005. |
| |
(3) | Profits of the UK property rental business— |
| |
(a) | are to be treated for the purposes of this Part as if they were (subject to |
| 30 |
the application of this Part) chargeable to corporation tax, and |
| |
(b) | are not to be charged to income tax. |
| |
521 | “UK company” and “non-UK company” |
| |
(1) | In this Part “UK company” means a company which is— |
| |
| 35 |
(b) | not resident in another place in accordance with the law of that place |
| |
| |
(2) | References in this Part to a “non-UK company”, in the case of a group of |
| |
companies, are to be read in accordance with subsection (1) (and references in |
| |
such a case to a company which is a “UK member” or “non-UK member” of the |
| 40 |
group are to be read accordingly). |
| |
|
| |
|