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
136

263
Application for postponement of tax pending appeal
No application may be made under section 55(3) or (4) of TMA 1970
(application for postponement of payment of tax pending appeal) on the
ground that a company is eligible for CITR unless a claim for the CITR has been
duly made by the company under this Part.
5
264
Identification of securities or shares on a disposal
(1)
This section applies for the purpose of identifying the securities or shares
disposed of in any case where—
(a)
the investor disposes of part of a holding of securities or shares (“the
holding”), and
10
(b)
the holding includes securities or shares to which CITR is attributable
in respect of one or more accounting periods that have been held
continuously by the investor from the time they were issued until the
disposal.
(2)
Any disposal by the investor of securities or shares included in the holding
15
which have been acquired by the investor on different days is treated as
relating to those acquired on an earlier day rather than to those acquired on a
later day.
(3)
If there is a disposal by the investor of securities or shares included in the
holding which have been acquired by the investor on the same day, any of
20
those securities or shares—
(a)
to which CITR is attributable, and
(b)
which have been held by the investor continuously from the time they
were issued until the time of disposal,

are treated as disposed of after any other securities or shares included in the
25
holding which were acquired by the investor on that day.
(4)
For the purposes of this section a holding of securities is any number of
securities of a company which—
(a)
carry the same rights,
(b)
were issued under the same terms, and
30
(c)
are held by the investor in the same capacity.

It does not matter for this purpose that the number of the securities grows or
diminishes as securities carrying those rights and issued under those terms are
acquired or disposed of.
(5)
For the purposes of this section a holding of shares is any number of shares in
35
a company which—
(a)
are of the same class, and
(b)
are held by the investor in the same capacity.

It does not matter for this purpose that the number of the shares grows or
diminishes as shares of that class are acquired or disposed of.
40
(6)
In a case to which section 127 of TCGA 1992 (equation of original shares and
new holding) applies, shares comprised in the new holding are to be treated for
the purposes of subsections (2) and (3) as acquired when the original shares
were acquired.
(7)
In subsection (6)—
45

Corporation Tax Bill
Part 7 — Community investment tax relief
Chapter 6 — Supplementary and general
137

(a)
the reference to section 127 of TCGA 1992 includes a reference to that
section as it is applied by virtue of any enactment relating to chargeable
gains, and
(b)
“original shares” and “new holding” have the same meaning as in
section 127 of TCGA 1992 or (as the case may be) that section as applied
5
by virtue of the enactment in question.
Definitions
265
Meaning of “issue of securities or shares”
(1)
In this Part—
(a)
references (however expressed) to an issue of securities of any body are
10
to such securities of that body as carry the same rights and are issued
under the same terms and on the same day, and
(b)
references (however expressed) to an issue of shares in any body are to
such shares in that body as are of the same class and issued on the same
day.
15
(2)
In this Part references (however expressed) to an issue of securities of or shares
in a body to a company are to such of the securities or shares in an issue of
securities of or shares in that body as are issued to that company in one
capacity.
266
Meaning of “disposal”
20
(1)
Subject to subsection (2), in this Part “disposal” is read in accordance with
TCGA 1992, and related expressions are read accordingly.
(2)
An investor is treated as disposing of any securities or shares which but for
section 151BC(1) of TCGA 1992 the investor—
(a)
would be treated as exchanging for other securities or shares by virtue
25
of section 136 of that Act, or
(b)
would be so treated but for section 137(1) of that Act (which restricts
section 136 to genuine reconstructions).
267
Construction of references to being “held continuously”
(1)
This section applies if for the purposes of this Part it becomes necessary to
30
determine whether the investor has held the investment (or any part of it)
continuously throughout any period.
(2)
The investor is not treated as having held the investment (or any part of it)
continuously throughout a period if the investor—
(a)
is treated, under any provision of TCGA 1992, as having disposed of
35
and immediately re-acquired the investment (or part) at any time
during the period, or
(b)
is treated as having disposed of the investment (or part) at any such
time, by virtue of section 266(2) above.
268
Meaning of “associate”
40
(1)
In this Part “associate”, in relation to a person, means—
(a)
any relative or partner of that person,

Corporation Tax Bill
Part 7 — Community investment tax relief
Chapter 6 — Supplementary and general
138

(b)
the trustee or trustees of any settlement in relation to which that person,
or any relative of that person (living or dead), is or was a settlor, and
(c)
if that person has an interest in any shares or obligations of a company
which are subject to any trust or are part of the estate of a deceased
person—
5
(i)
the trustee or trustees of the settlement concerned or, as the case
may be, the personal representatives of the deceased, and
(ii)
if that person is a company, any other company which has an
interest in those shares or obligations.
(2)
In subsection (1)(a) and (b) “relative” means spouse or civil partner, ancestor or
10
lineal descendant.
(3)
In subsection (1)(b) “settlor” and “settlement” have the same meaning as in
Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act).
269
Minor definitions etc
(1)
In this Part—
15
“body” includes an unincorporated association, and
“bonus shares” means shares which are issued otherwise than for
payment (whether in cash or otherwise).
(2)
For the purposes of this Part shares in a company are not treated as being of the
same class unless they would be so treated if they were—
20
(a)
included in the official UK list, and
(b)
admitted to trading on the London Stock Exchange.
(3)
For the purposes of this Part the market value at any time of any asset is the
price which it might reasonably be expected to fetch on a sale at that time in the
open market free from any interest or right which exists by way of security in
25
or over it.
(4)
In this Part—
(a)
references to CITR obtained by the investor in respect of any
investment (or part of an investment) include references to CITR
obtained by the investor in respect of that investment (or part) at any
30
time after the investor has disposed of it, and
(b)
references to the withdrawal or reduction of CITR obtained by the
investor in respect of the investment (or any part of it) include
references to the withdrawal or reduction of CITR obtained in respect
of that investment (or part) at any such time.
35
(5)
In the case of any condition that cannot be met until a future date—
(a)
references in this Part to a condition being met for the time being are to
nothing having occurred to prevent its being met, and
(b)
references to its continuing to be met are to nothing occurring to
prevent its being met.
40

Corporation Tax Bill
Part 8 — Oil activities
Chapter 2 — Basic definitions
139

Part 8
Oil activities
Chapter 1
Introduction
270
Overview of Part
5
(1)
This Part is about the corporation tax treatment of oil activities.
(2)
Chapter 2 contains basic definitions used in this Part.
(3)
Chapter 3 treats oil-related activities as a separate trade.
(4)
Chapter 4 makes provision about the calculation of profits from oil activities.
(5)
Chapter 5 makes provision about ring fence expenditure supplement.
10
(6)
Chapter 6 makes provision about the supplementary charge in respect of ring
fence trades.
(7)
Chapter 7 makes provision about the reduction of the supplementary charge
for certain new oil fields.
(8)
For the meaning of—
15
(a)
“oil-related activities”, see section 274,
(b)
“ring fence trade”, see section 277, and
(c)
“new oil field”, see section 350.
Chapter 2
Basic definitions
20
271
“Associated companies”
(1)
For the purposes of this Part two companies are associated with one another
if—
(a)
one is a 51% subsidiary of the other,
(b)
each is a 51% subsidiary of a third company,
25
(c)
one is owned by a consortium of which the other is a member,
(d)
one has control of the other, or
(e)
both are under the control of the same person.
(2)
For the purposes of this section—
(a)
a company is owned by a consortium if at least 75% of the company’s
30
ordinary share capital is beneficially owned by other companies each of
which beneficially owns at least 5% of that capital, and
(b)
the other companies each owning at least 5% of that capital are the
members of the consortium.
(3)
In this section “control” has the same meaning as in Part 10 (close companies)
35
(see sections 450 and 451).