Corporation Tax Bill

House of Commons

Session 2009 - 10
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Other Bills before Parliament

Corporation Tax Bill

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988
582

89
Omit section 587B (gifts of shares, securities and real property to charities
etc).
90
Omit section 587BA (qualifying interests in land held jointly).
91
Omit section 587C (supplementary provision for gifts of real property).
92
Omit section 687A (discretionary payments by trustees to companies).
5
93
Omit section 689B (order in which trustees’ expenses are to be set against
income).
94
Omit Chapter 1 of Part 17 (cancellation of corporation tax advantages from
certain transactions in securities).
95
Omit section 736A (manufactured dividends and interest).
10
96
Omit section 736B (deemed manufactured payments in the case of stock
lending arrangements).
97
In section 749B(3) (interests in companies) for “Part VI” substitute “Part 23 of
CTA 2010”.
98
In section 750(3)(c)(i) (territories with a lower level of taxation) for “section
15
7(2)” substitute “section 967 of CTA 2010”.
99
In section 751(6)(b) (accounting periods and creditable tax) for “section 7(2)”
substitute “section 967 of CTA 2010”.
100
In section 755D(10) (“control” and the two “40 per cent” tests) for “subsection
(7) of section 839” substitute “section 1122(4) of CTA 2010”.
20
101   (1)
Amend section 756 (interpretation and construction of Chapter 4) as follows.
      (2)
In subsection (2)—
(a)
in paragraph (a) for “section 839” substitute “section 1122 of CTA
2010”, and
(b)
for paragraph (b) substitute—
25
“(b)
subsections (2) to (7) of section 882 of CTA 2010
(meaning of associates) apply.”
      (3)
For subsection (3) substitute—
“(3)
In this Chapter “loan creditor” has the meaning given by section 453
of CTA 2010.”
30
102
Omit sections 767A to 769 (change in ownership of company).
103
In section 774(4)(e) (transactions between dealing company and associated
company) for “section 840” substitute “section 1124 of CTA 2010”.
104   (1)
Omit sections 774A to 774G (factoring of income receipts etc).
      (2)
Sub-paragraph (1) has effect for corporation tax purposes only.
35
105
Omit sections 776 to 778 (transactions in land).
106   (1)
Omit sections 779 to 785 (sale and lease-back etc).
      (2)
Sub-paragraph (1) has effect for corporation tax purposes only.
107
Omit section 785ZA (restrictions on use of losses: leasing partnerships).

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988
583

108
Omit section 785ZB (section 785ZA: definitions).
109
Omit section 785B (plant and machinery leases: capital receipts to be treated
as income).
110
Omit section 785C (section 785B: interpretation).
111
Omit section 785D (section 785B: lease of plant and machinery and other
5
property).
112
Omit section 785E (section 785B: expectation that relevant capital payment
will not be paid).
113   (1)
Omit section 786 (transactions associated with loans or credit).
      (2)
Sub-paragraph (1) has effect for corporation tax purposes only.
10
114
In section 806A(2) (eligible unrelieved foreign tax dividends:
introductory)—
(a)
in paragraph (a) for “trading income for the purposes of section 393”
substitute “a profit of the trade for the purposes of section 45 of CTA
2010”, and
15
(b)
in paragraph (b) for the words from “paragraphs” to the end of that
paragraph substitute “subsection (1)(a) and (b) of section 46 of CTA
2010, would by virtue of that section fall to be treated as a profit of
the trade for the purposes of section 45 of that Act”.
115
Omit section 808 (restriction on deduction of interest or dividends from
20
trading income).
116
In section 812(5) (withdrawal of right to tax credit of certain non-resident
companies)—
(a)
in paragraph (c) for “section 839” substitute “section 1122 of CTA
2010”, and
25
(b)
for paragraph (d) substitute—
“(d)
sections 449 to 451 of CTA 2010 apply but with the
substitution in section 449 of “6 years” for “12
months”.”
117   (1)
Amend section 826 (interest on tax overpaid) as follows.
30
      (2)
In subsection (4)—
(a)
for “section 419(4)”, in the first place, substitute “section 458 of CTA
2010”,
(b)
for “section 419(4), in the second place, substitute “that section”, and
(c)
for “section 419(4A)” substitute “section 458(4) of CTA 2010”.
35
      (3)
In subsection (7A)—
(a)
in paragraph (b)—
(i)
for “section 393A(1)”, in the first place, substitute “section 37
of CTA 2010”,
(ii)
for “set off” substitute “relieved”, and
40
(iii)
for “section 393A(1) or 393B(3)” substitute “section 37 or 42 of
that Act”, and
(b)
in the words after paragraph (c) for “section 393A(1)” substitute
“section 37 of CTA 2010”.

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988
584

118   (1)
Amend section 828 (orders and regulations made by the Treasury or the
Board) as follows.
      (2)
In subsection (1)—
(a)
omit the words “Subject to subsections (2) and (5) below,”, and
(b)
omit the words from “or under” to “after this Act)”.
5
      (3)
Omit subsection (2).
      (4)
In subsection (3)—
(a)
for “subsections (4) and (5)” substitute “subsection (4)”, and
(b)
omit the words from “or under” to “after this Act)”.
      (5)
In subsection (4), omit “or 840A(1)(d)”.
10
      (6)
Omit subsections (5) and (6).
119
Omit section 830(1) (territorial sea of the United Kingdom).
120
In section 831(3) (interpretation of ICTA) at the appropriate place insert—
““CTA 2010” means the Corporation Tax Act 2010;”.
121
Omit section 832 (interpretation of the Corporation Tax Acts).
15
122
Omit section 834 (interpretation of the Corporation Tax Acts).
123
Omit section 834A (miscellaneous charges).
124
Omit section 834B (meaning of “UK property business” and “overseas
property business”).
125
Omit section 834C (total profits).
20
126
Omit section 837A (meaning of “research and development”).
127
Omit section 837B (meaning of “oil and gas exploration and appraisal”).
128
Omit section 837C (meaning of “offshore installation”).
129
Omit section 838 (subsidiaries).
130
Omit section 839 (connected persons).
25
131
Omit section 840 (meaning of “control” in certain contexts).
132
Omit section 840ZA (meaning of “tax advantage”).
133
Omit section 840A (banks).
134
Omit section 841 (meaning of “recognised stock exchange” etc).
135
Omit section 842 (investment trusts).
30
136
Omit section 842A (local authorities).
137
Omit section 842B (meaning of “property investment LLP”).
138
In paragraph 5(2) of Schedule 10 (further provisions relating to profit
sharing schemes)—
(a)
in paragraph (a) for “section 209(2)(c)” substitute “condition C or D
35
in section 1000(1) of CTA 2010”,

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 1 — Income and Corporation Taxes Act 1988
585

(b)
in paragraph (b) for “section 210(1)” substitute “section 1022 of CTA
2010”, and
(c)
in paragraph (c) for “section 249” substitute “section 1049 of CTA
2010”.
139
Omit Schedule 17 (dual resident investing companies).
5
140
Omit Schedule 18 (group relief: equity holders and profits or assets available
for distribution).
141
Omit Schedule 18A (group relief: overseas losses of non-resident
companies).
142   (1)
Amend Schedule 19B (petroleum extraction activities: exploration
10
expenditure supplement) as follows.
      (2)
In paragraph 15(2) (supplement in respect of a post-commencement period)
for “Part 4 of Schedule 19C” substitute “sections 321 to 329 of CTA 2010”.
      (3)
In paragraph 18A(5) (special rule for straddling periods) for “paragraph 18
of Schedule 19C for the purposes of Part 4 of that Schedule” substitute
15
“section 324 of CTA 2010”.
143
Omit Schedule 19C (petroleum extraction activities: ring fence expenditure
supplement).
144
Omit Schedule 20 (charitable companies: qualifying investments and loans).
145
Omit Schedule 23A (manufactured dividends and interest).
20
146   (1)
Amend Schedule 24 (assumptions for calculating chargeable profits etc) as
follows.
      (2)
In paragraph 5(2) for “Chapter IV of Part X” substitute “Part 5 of CTA 2010”.
      (3)
In paragraph 8—
(a)
for “section 343” substitute “Chapter 1 of Part 22 of CTA 2010”, and
25
(b)
for each reference to “that section” substitute “that Chapter”.
147   (1)
Amend Schedule 25 (cases where section 747(3) of ICTA does not apply) as
follows.
      (2)
In paragraph 2—
(a)
in sub-paragraph (7)(a) for the words “fixed-rate preference shares as
30
defined in paragraph 1 of Schedule 18” substitute “restricted
preference shares as defined in section 160(2) to (7) of CTA 2010 as
modified by sub-paragraph (7A)”, and
(b)
after sub-paragraph (7) insert—
“(7A)
The modification referred to in sub-paragraph (7)(a) is, in
35
section 160 of CTA 2010, the substitution for subsection (6)
of—
    “(6)
Condition D is that the shares do not carry any right to
dividends other than dividends which—
(a)
are of a fixed amount or are at a fixed percentage
40
rate of the nominal value of the shares, and

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
586

(b)
represent no more than a reasonable commercial
return on the new consideration mentioned in
subsection (3).””
      (3)
In paragraph 12(3) for the words from “section 838” to the end substitute
“section 1154 of CTA 2010 has effect with the omission of the following—
5
(a)
in subsection (2), the words “or indirectly”, and
(b)
subsection (5).”
148   (1)
Amend Schedule 26 (reliefs against liability for tax in respect of chargeable
profits) as follows.
      (2)
In paragraph 1(3)(a) for “section 392A(1) or 393A(1)” substitute “section 37
10
or 62(1) to (3) of CTA 2010”.
      (3)
In paragraph 1(3)(b) for “charge on income to which section 338(1) applies”
substitute “qualifying charitable donation”.
149
Omit Schedule 28A (change in ownership of company with investment
business: deductions).
15
Part 2
Other enactments
Finance Act 1930 (c. 28)
150   (1)
Section 42 of the Finance Act 1930 (relief from transfer stamp duty in case of
transfer of property as between associated companies) is amended as
20
follows.
      (2)
In subsection (5)—
(a)
for “Schedule 18 to the Income and Corporation Taxes Act 1988”
substitute “Chapter 6 of Part 5 of the Corporation Tax Act 2010”, and
(b)
for “paragraphs (a) and (b) of section 413(7)” substitute “section
25
151(4)(a) and (b)”.
      (3)
In subsection (6) for “paragraphs 5(3) and 5B to 5E of Schedule 18 to the
Income and Corporation Taxes Act 1988” substitute “sections 171(1)(b) and
(3), 173, 174 and 176 to 178 of the Corporation Tax Act 2010”.
      (4)
In subsection (7) for “section 840 of the Income and Corporation Taxes Act
30
1988” substitute “section 1124 of the Corporation Tax Act 2010”.
Finance Act (Northern Ireland) 1954 (c. 23(N.I.))
151   (1)
Section 11 of the Finance Act (Northern Ireland) 1954 (c. 23(N.I.)) (relief from
stamp duty in case of transfer between associated companies) is amended as
follows.
35
      (2)
In subsection (6)—
(a)
for “Schedule 18 to the Income and Corporation Taxes Act 1988”
substitute “Chapter 6 of Part 5 of the Corporation Tax Act 2010”, and
(b)
for “paragraphs (a) and (b) of section 413(7)” substitute “section
151(4)(a) and (b)”.
40

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
587

      (3)
In subsection (7) for “paragraphs 5(3) and 5B to 5E of Schedule 18 to the
Income and Corporation Taxes Act 1988” substitute “sections 171(1)(b) and
(3), 173, 174 and 176 to 178 of the Corporation Tax Act 2010”.
      (4)
In subsection (8) for “section 840 of the Income and Corporation Taxes Act
1988” substitute “section 1124 of the Corporation Tax Act 2010”.
5
Taxes Management Act 1970 (c. 9)
152
The Taxes Management Act 1970 is amended as follows.
153
In section 12AB(5) (partnership return to include partnership statement), in
the definition of “tax credit”, for “section 231 of the principal Act” substitute
“section 1109 of CTA 2010”.
10
154
In section 12B(4A) (records to be kept for purposes of returns) for “section
234 of the principal Act” substitute “section 1100 of CTA 2010”.
155
In section 59E(11) (further provision as to when corporation tax is due and
payable)—
(a)
in paragraph (a) for “section 419 of the principal Act (loans to
15
participators etc)” substitute “section 455 of CTA 2010 (charge to tax
in case of loan to participator)”, and
(b)
in paragraph (c) for “section 501A(1) of the principal Act” substitute
“section 330(1) of CTA 2010”.
156   (1)
Amend section 87A (interest on overdue corporation tax etc) as follows.
20
      (2)
In subsection (3)—
(a)
omit “Schedule 28 to the Finance Act 2000 or”, and
(b)
after “2002” insert “or Chapter 7 of Part 22 of CTA 2010”.
      (3)
In subsection (5) for “252(5) of the principal Act” substitute “1111(2) of CTA
2010”.
25
      (4)
In subsection (6)(a)—
(a)
for “section 393A(1) of the principal Act” substitute “section 37 of
CTA 2010”, and
(b)
for “set off (whether under section 393A(1) or 393B(3))” substitute
“relieved (whether under that section or section 42 of that Act)”.
30
157   (1)
Amend section 98 (special returns etc) as follows.
      (2)
In the first column of the Table—
(a)
omit the entries relating to—
(i)
section 217(4) of ICTA,
(ii)
section 226(4) of ICTA,
35
(iii)
section 234(7)(b), (8) and (9) of ICTA,
(iv)
section 250(6) of ICTA,
(v)
section 768(9) of ICTA,
(vi)
section 778 of ICTA, and
(vii)
paragraphs 3 and 4 of Schedule 12 to FA 1989,
40
(b)
at the appropriate place in the list of entries relating to ITTOIA 2005
insert—
“section 401B of ITTOIA 2005.
section 421A of ITTOIA 2005.”, and

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
588

(c)
at the end insert—
“section 31 of CTA 2010.
section 465 of CTA 2010.
section 728 of CTA 2010.
section 832 of CTA 2010.
5
section 1046(5) to (7) of CTA 2010.
section 1052(4) and (5) of CTA 2010.
section 1097(1) and (2) of CTA 2010.
section 1101(5) and (6) of CTA 2010.
section 1102 of CTA 2010.
10
section 1109 of CTA 2010.”
      (3)
In the second column of the Table—
(a)
omit the entries relating to—
(i)
section 216 of ICTA,
(ii)
section 226(1) and (2) of ICTA,
15
(iii)
section 234(5), (6) and (7)(a) of ICTA,
(iv)
section 250(1) to (5) of ICTA, and
(v)
paragraph 42 of Schedule 16 to FA 2002, and
(b)
at the end insert—
“section 260 of CTA 2010.
20
section 1046(1) to (4) of CTA 2010.
section 1095 of CTA 2010.
section 1096 of CTA 2010.
section 1052(1) to (3) of CTA 2010.
section 1101(1), (2) and (4) of CTA 2010.”
25
158   (1)
Amend section 109 (corporation tax on close companies in connection with
loans to participators etc) as follows.
      (2)
In subsection (1) for “sections 419 and 420 of the principal Act” substitute
“sections 455 to 459 of CTA 2010”.
      (3)
In subsection (3) for “the said section 419” substitute “section 455 of CTA
30
2010”.
      (4)
In subsection (3A)—
(a)
in paragraph (a) for “subsection (4) of section 419 of the principal
Act” substitute “subsection (2) of section 458 of CTA 2010”, and
(b)
for “the said section 419” substitute “section 455 of CTA 2010”.
35
      (5)
In subsection (4) for “section 419(4) of the principal Act” substitute “section
458 of CTA 2010”.
      (6)
In subsection (5) for “the said sections 419 and 420” substitute “sections 455
to 459 of CTA 2010”.
159
In section 118(1) (interpretation)—
40
(a)
in the definition of “company” for “section 992(1) of ITA 2007 (with
section 468 of the principal Act)” substitute “section 1121(1) of CTA
2010 (with section 617 of that Act)”, and
(b)
at the appropriate place insert—
““CTA 2010” means the Corporation Tax Act 2010,”.
45