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CORPORATION TAX BILL
EXPLANATORY NOTES
[VOLUME I]
The Explanatory Notes are divided into four volumes.
Volume I contains the Introduction to the Bill and Notes on clauses 1 to 465 of the Bill.
Volume II contains Notes on clauses 466 to 937 of the Bill
Volume III contains Notes on clauses 938 to 1185 of and Schedules 1 to 4 to the Bill
Volume IV contains Annexes to the Notes.
Bill 1—EN (I) 54/5
CORPORATION TAX BILL
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EXPLANATORY NOTES - VOLUME 1
(INTRODUCTION AND CLAUSES 1 TO 465)
TABLE OF CONTENTS
INTRODUCTION 15
SUMMARY 15
BACKGROUND 16
CORPORATION TAX BILL 18
Glossary 20
Part 1: Introduction 21
Clause 1: Overview of Act 21
Part 2: Calculation of liability in respect of profits 21
Chapter 1: Introduction 21
Clause 2: Overview of Part 21
Chapter 2: Rates at which corporation tax on profits charged 21
Clause 3: Corporation tax rates 21
Chapter 3: Calculation of amount to which rates applied 21
Clause 4: Amount of profits to which corporation tax rates applied 22
Chapter 4: Currency 23
Clause 5: Basic rule: sterling to be used 23
Clause 6: UK resident company operating in sterling and preparing accounts in another currency 23
Clause 7: UK resident company operating in currency other than sterling and preparing accounts in another currency 24
Clause 8: UK resident company preparing accounts in currency other than sterling 24
Clause 9: Non-UK resident company preparing return of accounts in currency other than sterling 24
Clause 10: The equivalent in another currency of a sterling amount 25
Clause 11: Sterling equivalents: basic rule 25
Clause 12: Sterling equivalents: carried-back amounts 25
Clause 13: Sterling equivalents: carried-forward amounts 25
Clause 14: Carried-back amounts 25
Clause 15: Carried-forward amounts 25
Clause 16: Sections 13(2) and 19(5): profit against which carried-forward amount to be set 25
Clause 17: Interpretation of Chapter 25
Part 3: Companies with small profits 26
Clause 18: Profits charged at the small profits rate 26
Clause 19: Marginal relief 26
Clause 20: Company with only ring fence profits 27
Clause 21: Company with ring fence profits and other profits 27
Clause 22: The ring fence amount 27
Clause 23: The remaining amount 27
Clause 24: The lower limit and the upper limit 28
Clause 25: Associated companies 28
Clause 26: Section 25(3): treatment of certain non-trading companies 29
Clause 27: Attribution to persons of rights and powers of their partners 29
Clause 28: Associated companies: fixed-rate preference shares 29
Clause 29: Association through a loan creditor 30
Clause 30: Association through a trustee 30
Clause 31: Power to obtain information 31
Clause 32: Meaning of “augmented profits” 31
Clause 33: Interpretation of section 32(2) and (3) 31
Clause 34: Close investment-holding companies 32
Part 4: Loss relief 33
Chapter 1: Introduction 33
Clause 35: Overview of Part 33
Chapter 2: Trade losses 34
Clause 36: Introduction to Chapter 34
Clause 37: Relief for trade losses against total profits 34
Clause 38: Limit on deduction if accounting period falls partly within 12 month period 35
Clause 39: Terminal losses: extension of periods for which relief may be given 36
Clause 40: Ring fence trades: extension of periods for which relief may be given 36
Clause 41: Sections 39 and 40: transfers of trade to obtain relief 36
Clause 42: Ring fence trades: further extension of period for relief 36
Clause 43: Claim period in case of ring fence or mineral extraction trades 37
Clause 44: Trade must be commercial or carried on for statutory functions 37
Clause 45: Carry forward of trade loss against subsequent trade profits 37
Clause 46: Use of trade-related interest and dividends if insufficient trade profits 38
Clause 47: Registered industrial and provident societies 38
Clause 48: Farming or market gardening 38
Clause 49: Reasonable expectation of profit 39
Clause 50: Cessation of trades 39
Clause 51: Companies treated as same person as individual 39
Clause 52: Dealings in commodity futures 40
Clause 53: Leasing contracts and company reconstructions 40
Clause 54: Non-UK resident company: receipts of interest, dividends or royalties 40
Chapter 3: Limited partners and members of limited liability partnerships 40
Clause 55: Introduction to Chapter 40
Clause 56: Restriction on reliefs for limited partners 41
Clause 57: Meaning of “contribution to the firm” 41
Clause 58: Meaning of “limited partner” 41
Clause 59: Restriction on relief for members of LLPs 42
Clause 60: Meaning of “contribution to the LLP” 42
Clause 61: Unrelieved losses brought forward 42
Chapter 4: Property losses 42
Clause 62: Relief for losses made in UK property business 42
Clause 63: Company with investment business ceasing to carry on UK property business 43
Clause 64: UK property business to be commercial or carried on for statutory functions 44
Clause 65: UK furnished holiday lettings business treated as trade 44
Clause 66: Relief for losses made in overseas property business 44
Clause 67: Overseas property business to be commercial or carried on for statutory functions 45
Chapter 5: Losses on disposal of shares 45
Clause 68: Share loss relief 45
Clause 69: Eligibility conditions 46
Clause 70: Entitlement to claim 46
Clause 71: How relief works 46
Clause 72: Limit on deduction if accounting period falls partly within 12 month period 47
Clause 73: Subscription for shares 47
Clause 74: Disposals of new shares 47
Clause 75: Limits on relief 48
Clause 76: Disposal of shares forming part of mixed holding 48
Clause 77: Section 76: supplementary 49
Clause 78: Qualifying trading companies 49
Clause 79: The trading requirement 50
Clause 80: Ceasing to meet trading requirement because of administration etc 50
Clause 81: The control and independence requirement 50
Clause 82: The qualifying subsidiaries requirement 50
Clause 83: The property managing subsidiaries requirement 50
Clause 84: The gross assets requirement 50
Clause 85: The unquoted status requirement 50
Clause 86: Power to amend requirements by Treasury order 50
Clause 87: Relief after an exchange of shares for shares in another company 50
Clause 88: Substitution of new shares for old shares 51
Clause 89: Deemed time of issue for certain shares 51
Clause 90: Interpretation of Chapter 51
Chapter 6: Losses from miscellaneous transactions 51
Clause 91: Relief for losses from miscellaneous transactions 51
Chapter 7: Write-off of government investment 52
Clause 92: Loss relief to be reduced in case of write-off of government investment 52
Clause 93: Groups of companies 52
Clause 94: Cases in which government investment is written off 52
Clause 95: Meaning of “carry-forward losses” 52
Clause 96: Interaction with other tax provisions 52
Part 5: Group relief 53
Chapter 1: Introduction 55
Clause 97: Introduction to Part 55
Chapter 2: Surrender of company’s losses etc for an accounting period 55
Clause 98: Overview of Chapter 55
Clause 99: Surrendering of losses and other amounts 55
Clause 100: Meaning of “trading loss” 56
Clause 101: Meaning of “capital allowance excess” 56
Clause 102: Meaning of “UK property business loss” 57
Clause 103: Meaning of “management expenses” 57
Clause 104: Meaning of “non-trading loss on intangible fixed assets” 57
Clause 105: Restriction on surrender of losses etc within section 99(1)(d) to (g) 58
Clause 106: Restriction on losses etc surrenderable by UK resident 58
Clause 107: Restriction on losses etc surrenderable by non-UK resident 59
Clause 108: Meaning of “non-UK profits” 60
Clause 109: Restriction on losses etc surrenderable by dual resident 61
Clause 110: Restriction on surrender of losses etc from alternative finance arrangements 61
Chapter 3: Surrenders made by non-UK resident company resident or trading in the EEA 61
Clause 111: Overview of Chapter 62
Clause 112: EEA related definitions 62
Clause 113: Steps to determine extent to which loss etc can be surrendered 62
Clause 114: The equivalence condition 63
Clause 115: The EEA tax loss condition: companies resident in EEA territory 63
Clause 116: The EEA tax loss condition: companies not resident in EEA territory 63
Clause 117: The qualifying loss condition: general 64
Clause 118: The qualifying loss condition: relief for current and previous periods 64
Clause 119: The qualifying loss condition: relief for future periods 65
Clause 120: The qualifying loss condition: non-UK tax relief in another territory 65
Clause 121: The precedence condition 65
Clause 122: Assumptions to be made in recalculating EEA amount 67
Clause 123: Assumptions as to UK residence 67
Clause 124: Assumptions as to places in which activities carried on 67
Clause 125: Assumptions as to accounting periods 68
Clause 126: Assumptions in relation to capital allowances 68
Clause 127: Amounts excluded because of certain arrangements 68
Clause 128: Rules for recalculating EEA amount 69
Chapter 4: Claims for group relief 69
Clause 129: Overview of Chapter 69
Clause 130: Group relief claims on amounts surrenderable under Chapter 2 69
Clause 131: The group condition 71
Clause 132: Consortium condition 1 71
Clause 133: Consortium conditions 2 and 3 71
Clause 134: Meaning of “UK related” company 72
Clause 135: Group relief claims on amounts surrenderable under Chapter 3 72
Clause 136: The EEA group condition 73
Clause 137: Deduction from total profits 73
Clause 138: Limitation on amount of group relief applying to all claims 74
Clause 139: Unused part of the surrenderable amounts 74
Clause 140: Unrelieved part of claimant company’s available total profits 75
Clause 141: Sections 139 and 140: supplementary 76
Clause 142: Meaning of “the overlapping period” 76
Clause 143: Condition 1: surrendering company owned by consortium 77
Clause 144: Condition 1: claimant company owned by consortium 78
Clause 145: Conditions 2 and 3: limitations in sections 143 and 144 79
Clause 146: Conditions 2 and 3: companies in link company’s group 80
Clause 147: Conditions 1 and 2: surrenderable amounts including trading loss 81
Clause 148: Conditions 1 and 2: surrendering company in group of companies 82
Clause 149: Conditions 1 and 3: claimant company in group of companies 83
Chapter 5: Subsidiaries, groups and consortiums 84
Clause 150: Overview of Chapter 84
Clause 151: Meaning of “75% subsidiary” and “90% subsidiary” 84
Clause 152: Groups of companies 84
Clause 153: Companies owned by consortiums and members of consortiums 85
Clause 154: Arrangements for transfer of member of group of companies etc 85
Clause 155: Arrangements for transfer of company owned by consortium etc 85
Clause 156: Sections 154 and 155: supplementary 86
Chapter 6: Equity holders and profits or assets available for distribution 86
Clause 157: Introduction to Chapter 87
Clause 158: Meaning of “equity holder” 87
Clause 159: Use of relevant company’s assets 87
Clause 160: Meaning of “ordinary shares” 88
Clause 161: Meaning of “restricted right to dividends” 88
Clause 162: Meaning of “normal commercial loan” 88
Clause 163: Normal commercial loans: company’s results or value of assets 89
Clause 164: Sections 160 and 162: supplementary 89
Clause 165: Proportion of profits available for distribution to which company is entitled 90
Clause 166: Proportion of assets available for distribution to which company is entitled 91
Clause 167: Profits or assets available for distribution and entitlement: supplementary 91
Clause 168: Meaning of “the relevant accounting period” 91
Clause 169: Application and interpretation of sections 170 to 182 92
Clause 170: Shares or securities with limited rights 92
Clause 171: Shares or securities with temporary rights 92
Clause 172: Company A’s proportion if shares etc have temporary rights 92
Clause 173: Cases in which option arrangements are in place 93
Clause 174: Company A’s proportion if option arrangements in place 93
Clauses 175 to 178 94
Clause 175: Cases in which both sections 170 and 172 apply 95
Clause 176: Cases in which both sections 170 and 174 apply 95
Clause 177: Cases in which both sections 172 and 174 apply 95
Clause 178: Cases in which sections 170, 172 and 174 all apply 95
Clause 179: Cases in which surrendering or claimant company is non-UK resident 95
Clause 180: Company A’s proportion if non-UK resident involved 96
Clause 181: Assumptions to be applied if non-UK resident company involved 96
Clause 182: Assets etc referable to UK trade 96
Chapter 7: Miscellaneous provisions and interpretation of Part 97
Clause 183: Payments for group relief 97
Clause 184: References to “allowance” in CAA 2001 97
Clause 185: “Trading company” and “holding company” 97
Clause 186: When activities of company are double taxation exempt 97
Clause 187: Meaning of “non-UK tax” 98
Clause 188: Other definitions that apply for the purposes of the Part 98
Part 6: Qualifying charitable donations 98
Chapter 1: Nature of relief 99
Clause 189: Relief for qualifying charitable donations 99
Clause 190: Qualifying charitable donations: meaning 99
Chapter 2: Certain payments to charity 99
Clause 191: Qualifying payments 99
Clause 192: Condition as to repayment 99
Clause 193: Associated acquisition etc 99
Clause 194: Distributions 100
Clause 195: Associated benefits 100
Clause 196: Associated benefits: meaning 100
Clause 197: Restrictions on associated benefits 100
Clause 198: Payments and benefits linked to periods of less than 12 months 100
Clause 199: Payment attributed to earlier accounting period 101
Clause 200: Company wholly owned by a charity 101
Clause 201: Associated persons 101
Clause 202: “Charity” 101
Chapter 3: Certain disposals to charity 102
Clause 203: Certain disposals of investments 102
Clause 204: Meaning of qualifying investment 102
Clause 205: Meaning of qualifying interest in land 102
Clause 206: The relievable amount 102
Clause 207: Incidental costs of making disposal 103
Clause 208: Consideration 103
Clause 209: Value of net benefit to charity 103
Clause 210: Market value of qualifying investments 104
Clause 211: Meaning of “disposal-related obligation” 104
Clause 212: Meaning and amount of “disposal-related liability” 104
Clause 213: Certificate required from charity 104
Clause 214: Qualifying interests in land held jointly 104
Clause 215: Calculation of relievable amount etc where joint disposal of interest in land 105
Clause 216: Disqualifying events 105
Clause 217: “Charity” 105
Part 7: Community investment tax relief 105
Chapter 1: Introduction 105
Clause 218: Meaning of “CITR” 105
Clause 219: Eligibility for CITR 106
Clause 220: Form and amount of CITR 106
Clause 221: Meaning of “making an investment” 107
Clause 222: Determination of “the invested amount” 107
Clause 223: Meaning of “the 5 year period” and “the investment date” 107
Clause 224: Overview of other Chapters of Part 107
Chapter 2: Qualifying investments 107
Clause 225: Qualifying investments: introduction 107
Clause 226: Conditions to be met in relation to loans 107
Clause 227: Conditions to be met in relation to securities 108
Clause 228: Conditions to be met in relation to shares 108
Clause 229: Tax relief certificates 108
Clause 230: No pre-arranged protection against risks 109
Chapter 3: General conditions 109
Clause 231: No control of CDFI by investor 109
Clause 232: Investor must have beneficial ownership 109
Clause 233: Investor must not be accredited 109
Clause 234: No acquisition of share in partnership 110
Clause 235: No tax avoidance purpose 110
Chapter 4: Limitations on claims and attribution 110
Clause 236: Loans: no claim after disposal or excessive repayments or receipts of value 110
Clause 237: Securities or shares: no claim after disposal or excessive receipts of value 110
Clause 238: No claim after loss of accreditation by the CDFI 110
Clause 239: Accreditation of investor 111
Clause 240: Attribution: general 111
Clause 241: Attribution: bonus shares 111
Chapter 5: Withdrawal or reduction of CITR 111
Clause 242: Introduction to Chapter 111
Clause 243: Disposal of loan during 5 year period 112
Clause 244: Disposal of securities or shares during 5 year period 112
Clause 245: Repayment of loan capital during 5 year period 112
Clause 246: Value received by investor during 6 year period: loans 112
Clause 247: Value received by investor during 6 year period: securities or shares 113
Clause 248: Receipts of insignificant value to be added together 113
Clause 249: When value is received 113
Clause 250: The amount of value received 114
Clause 251: Value received if there is more than one investment 114
Clause 252: Effect of receipt of value on future claims 114
Clause 253: Receipts of value by or from connected persons 114
Clause 254: CITR subsequently found not to have been due 115
Clause 255: Manner of withdrawal or reduction of CITR 115
Chapter 6: Supplementary and general 115
Clause 256: Meaning of “loan” and “interest” 115
Clause 257: Purchase and resale arrangements 115
Clause 258: Deposit arrangements 115
Clause 259: Profit share agency arrangements 116
Clause 260: Information to be provided by the investor 116
Clause 261: Disclosure 116
Clause 262: Nominees 116
Clause 263: Application for postponement of tax pending appeal 116
Clause 264: Identification of securities or shares on a disposal 116
Clause 265: Meaning of “issue of securities or shares” 116
Clause 266: Meaning of “disposal” 116
Clause 267: Construction of references to being “held continuously” 117
Clause 268: Meaning of “associate” 117
Clause 269: Minor definitions etc 117
Part 8: Oil activities 118
Chapter 1: Introduction 119
Clause 270: Overview of Part 119
Chapter 2: Basic definitions 119
Clause 271: “Associated companies” 119
Clause 272: “Oil extraction activities” 119
Clause 273: “Oil rights” 119
Clause 274: “Oil-related activities” 119
Clause 275: “Ring fence income” 120
Clause 276: “Ring fence profits” 120
Clause 277: “Ring fence trade” 120
Clause 278: Other definitions 120
Chapter 3: Deemed separate trade 120
Clause 279: Oil-related activities treated as separate trade 120
Chapter 4: Calculation of profits 120
Clause 280: Disposal to be valued by reference to section 2(5A) of OTA 1975 121
Clause 281: Valuation where market value taken into account under section 2 of OTA 1975 121
Clause 282: Valuation where disposal not sale at arm’s length 122
Clause 283: Valuation where excess of nominated proceeds 122
Clause 284: Valuation where relevant appropriation but no disposal 123
Clause 285: Valuation where appropriation to refining etc 123
Clause 286: Restriction on debits to be brought into account 123
Clause 287: Restriction on credits to be brought into account 123
Clause 288: Sale and lease-back 124
Clause 289: Reduction of expenditure by reference to regional development grant 124
Clause 290: Adjustment as a result of regional development grant 124
Clause 291: Tariff receipts etc 125
Clause 292: Expenditure on and under abandonment guarantees 125
Clause 293: Relief for reimbursement expenditure under abandonment guarantees 126
Clause 294: Payment under abandonment guarantee not immediately applied 126
Clause 295: Amounts excluded from section 293(1) 126
Clause 296: Introduction to sections 297 and 298 126
Clause 297: Relief for expenditure incurred by a participator in meeting defaulter’s abandonment expenditure 127
Clause 298: Reimbursement by defaulter in respect of certain abandonment expenditure 127
Clause 299: Deduction of PRT in calculating income for corporation tax purposes 127
Clause 300: Effect of repayment of PRT: general rule 127
Clause 301: Effect of repayment of PRT: special rule 128
Clause 302: Interest on repayment of PRT or APRT 128
Clause 303: Management expenses 128
Clause 304: Losses 128
Clause 305: Group relief 129
Clause 306: Capital allowances 129
Chapter 5: Ring fence expenditure supplement 129
Clause 307: Overview of Chapter 129
Clause 308: Qualifying companies 129
Clause 309: Accounting periods 129
Clause 310: The relevant percentage 130
Clause 311: Limit on number of accounting periods for which supplement may be claimed 130
Clause 312: Qualifying pre-commencement expenditure 130
Clause 313: Unrelieved group ring fence profits for accounting periods 130
Clause 314: Taxable ring fence profits for an accounting period 130
Clause 315: Supplement in respect of a pre-commencement accounting period 130
Clause 316: The mixed pool of qualifying pre-commencement expenditure and supplement previously allowed 131
Clause 317: Reduction in respect of disposal receipts under CAA 2001 131
Clause 318: Reduction in respect of unrelieved group ring fence profits 131
Clause 319: The reference amount for a pre-commencement period 131
Clause 320: Claims for pre-commencement supplement 131
Clause 321: Supplement in respect of a post-commencement period 131
Clause 322: Amount of post-commencement supplement for a post-commencement period. 132
Clause 323: Ring fence losses 132
Clause 324: Special rule for straddling periods 132
Clause 325: The pool of ring fence losses and the pool of non-qualifying Schedule 19B losses 132
Clause 326: The ring fence pool 132
Clause 327: Reductions in respect of utilised ring fence losses 132
Clause 328: Reductions in respect of unrelieved group ring fence profits 133
Clause 329: The reference amount for a post-commencement period 133
Chapter 6: Supplementary charge in respect of ring fence trades 133
Clause 330: Supplementary charge in respect of ring fence trades 133
Clause 331: Meaning of “financing costs” etc 133
Clause 332: Assessment, recovery and postponement of supplementary charge 133
Chapter 7: Reduction of supplementary charge for certain new oil fields 133
Clause 333: Reduction of adjusted ring fence profits 134
Clause 334: Company’s pool of field allowances 134
Clause 335: Carrying part of pool of field allowances into following period 134
Clause 336: Carrying whole of pool of field allowances into following period 134
Clause 337: Initial licensee to hold a field allowance 134
Clause 338: Holding a field allowance on acquisition of equity share 134
Clause 339: Unactivated amount of field allowance 134
Clause 340: Introduction to section 341 134
Clause 341: Activation of field allowance 135
Clause 342: Introduction to sections 343 and 344 135
Clause 343: Reference periods 135
Clause 344: Activation of field allowance 135
Clause 345: Introduction to sections 346 and 347 135
Clause 346: Reduction of field allowance if equity disposed of 135
Clause 347: Acquisition of field allowance if equity acquired 135
Clause 348: Adjustments 135
Clause 349: Orders 135
Clause 350: “New oil field” 136
Clause 351: “Authorisation of development of an oil field” 136
Clause 352: “Qualifying oil field” 136
Clause 353: “Small oil field” 136
Clause 354: “Ultra heavy oil field” 136
Clause 355: “Ultra high pressure/high temperature oil field” 136
Clause 356: “Total field allowance for a new oil field” 136
Clause 357: Other definitions 136
Part 9: Leasing plant or machinery 136
Chapter 1: Introduction 137
Clause 358: Introduction to Part 137
Chapter 2: Long funding leases of plant or machinery 137
Clause 359: Overview of Chapter 137
Clause 360: Lessor under long funding finance lease: rental earnings 138
Clause 361: Lessor under long funding finance lease: exceptional items 138
Clause 362: Lessor under long funding finance lease making termination payment 138
Clause 363: Lessor under long funding operating lease: periodic deduction 139
Clause 364: “Starting value”: general 139
Clause 365: “Starting value” where plant or machinery originally unqualifying 139
Clause 366: Long funding operating lease: lessor’s additional expenditure 139
Clause 367: Determination of remaining residual value resulting from lessor’s first additional expenditure 140
Clause 368: Determination of remaining residual value resulting from lessor’s further additional expenditure 140
Clause 369: Lessor under long funding operating lease: termination of lease 140
Clause 370: Plant or machinery held as trading stock 140
Clause 371: Adjustments where sections 360 to 369 subsequently disapplied by section 370 141
Clause 372: Lessor also lessee under non-long funding lease 141
Clause 373: Other avoidance 141
Clause 374: Provision supplementing section 373 141
Clause 375: Adjustments where sections 360 to 369 subsequently disapplied by section 373 141
Clause 376: Films 142
Clause 377: Lessee under long funding finance lease: limit on deductions 142
Clause 378: Lessee under long funding finance lease: termination 142
Clause 379: Lessee under long funding operating lease 142
Clause 380: “Starting value” in section 379 143
Clause 381: Interpretation of Chapter 143
Chapters 3 to 6: The sales of lessors Chapters 143
Chapter 3: Sales of lessors: leasing business carried on by a company alone 144
Clause 382: Introduction to Chapter 144
Clause 383: Income and matching expense in different accounting periods 144
Clause 384: Amount of income and expense 144
Clause 385: No carry back of the expense 144
Clause 386: Relief for expense otherwise giving rise to carried forward loss 144
Clause 387: “Business of leasing plant or machinery” 145
Clause 388: “Relevant plant or machinery value” for condition A in section 387 145
Clause 389: Provision supplementing section 388 146
Clause 390: Relevant plant or machinery value where relevant company lessee under long funding lease etc 146
Clause 391: Relevant company’s income for condition B in section 387 146
Clause 392: “Qualifying change of ownership” 146
Clause 393: Qualifying 75% subsidiaries 146
Clause 394: Consortium relationships 147
Clause 395: No qualifying change of ownership in the case of certain intra-group reorganisations 148
Clause 396: No qualifying change of ownership where principal company’s interest in consortium company unchanged 148
Clause 397: Companies owned by consortiums and members of consortiums 148
Clause 398: “Qualifying 75% or 90% subsidiary” etc 148
Clause 399: The amount of the income: the basic amount 149
Clause 400: “PM” in section 399 149
Clause 401: Provisions supplementing section 400 149
Clause 402: “PM” where relevant company lessee under long funding lease etc 149
Clause 403: “TWDV” in section 399 149
Clause 404: Amount to be nil if basic amount negative 150
Clause 405: Adjustment to the basic amount: qualifying 75% subsidiaries 150
Clause 406: Adjustment to the basic amount: consortium relationships 150
Clause 407: Migration 150
Clause 408: “Associated company” 151
Chapter 4: Sales of lessors: leasing business carried on by a company in partnership 151
Clause 409: Introduction to Chapter 151
Clause 410: “Business of leasing plant or machinery” 151
Clause 411: “Relevant plant or machinery value” for condition A in section 410 152
Clause 412: Provision supplementing section 411 152
Clause 413: Relevant plant or machinery value where partnership lessee under long funding lease etc 152
Clause 414: Partnership’s income for condition B in section 410 153
Clause 415: “Qualifying change” in company’s interest in a business 153
Clause 416: Determining the percentage share in the profits or loss of business 153
Clause 417: Partner company’s income and other companies’ matching expense 153
Clause 418: Amount of income and expense 153
Clause 419: Relief for expense otherwise giving rise to carried forward loss 154
Clause 420: Exception: companies carrying on business ceasing to share in its profits 154
Clause 421: The amount of the income: the basic amount 154
Clause 422: Amount to be nil if basic amount negative 155
Clause 423: Adjustment to the basic amount 155
Clause 424: The amount of expense 155
Clause 425: Partner company’s income and matching expense in different accounting periods 156
Clause 426: Amount of income and expense 156
Clause 427: No carry back of the expense 156
Clause 428: Relief for expense otherwise giving rise to carried forward loss 156
Clause 429: The amount of the income 157
Clause 430: “Associated company” 157
Clause 431: “Profits” and “loss” 158
Chapter 5: Sales of lessors: anti-avoidance provisions 158
Clause 432: Restrictions on relief for Chapter 3 or 4 expenses: introduction 158
Clause 433: Restrictions applying to the restricted loss amount 158
Clause 434: Introduction to sections 435 and 436 158
Clause 435: Disregard of increases and decreases in balance sheet amounts 159
Clause 436: Balance sheet amounts determined on assumption company has no liabilities 159
Chapter 6: Sales of lessors: general interpretation 160
Clause 437: Interpretation of the sales of lessors Chapters 160
Part 10: Close companies 160
Chapter 1: Overview of Part 160
Clause 438: Overview of Part 160
Chapter 2: Basic definitions 161
Clause 439: “Close company” 161
Clause 440: Basis of winding up under section 439(3) 162
Clause 441: Treatment of some persons as participators or directors for the purposes of section 439(3) 162
Clause 442: Particular types of company 162
Clause 443: Companies controlled by or on behalf of Crown 162
Clause 444: Companies involved with non-close companies 162
Clause 445: Section 444: registered pension schemes 163
Clause 446: Particular types of quoted company 163
Clause 447: Section 446: meaning of “shares beneficially held by the public” etc 163
Clauses 448 and 449: “Associate”; “associated company” 164
Clause 450: “Control” 164
Clause 451: Section 450: rights to be attributed etc 164
Clause 452: “Director” 164
Clauses 453 and 454 “Loan creditor”; “participator” 165
Chapter 3: Charge to tax in case of loan to participator 165
Clause 455: Charge to tax in case of loan to participator 165
Clause 456: Exceptions to the charge under section 455 166
Clause 457: Section 456: meaning of “material interest in a company” 166
Clause 458: Relief in case of repayment or release of loan 167
Clause 459: Loan treated as made to participator 167
Clause 460: Loan treated as made by close company 168
Clause 461: Exception to section 460 168
Clause 462: Determination of particular questions as a result of section 460 168
Clause 463: Taxation of debtor on release of loan to trustees of settlement which has ended 169
Clause 464: Section 463: other person treated as releasing or writing off debt 169
Chapter 4: Power to obtain information 169
Clause 465: Power to obtain information 169
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