|
| |
|
(a) | when the expenditure was incurred, and |
| |
(b) | when the event giving rise to the disposal value occurred. |
| |
(3) | For the purpose of allocating qualifying pre-commencement expenditure to |
| |
the pool for each pre-commencement period— |
| |
(a) | find the total amount of the disposal values in the case of all such events |
| 5 |
| |
(b) | taking later periods before earlier periods, reduce (but not below nil) |
| |
amount E for any pre-commencement period by setting against it so |
| |
much of amount D as does not fall to be set against amount E for a later |
| |
| 10 |
318 | Reduction in respect of unrelieved group ring fence profits |
| |
(1) | This section applies if there is an amount of unrelieved group ring fence profits |
| |
for a pre-commencement period. |
| |
(2) | For the purpose of allocating qualifying pre-commencement expenditure to |
| |
the pool for that period— |
| 15 |
(a) | find so much (if any) of amount E for that period as remains after any |
| |
reduction falling to be made under section 317, and |
| |
(b) | reduce that amount (but not below nil) by setting against it a sum equal |
| |
to the aggregate of the amounts of unrelieved group ring fence profits |
| |
| 20 |
319 | The reference amount for a pre-commencement period |
| |
For the purposes of section 315, the reference amount for a pre-commencement |
| |
period is the amount in the pool at the end of the period— |
| |
(a) | after the addition to the pool of any qualifying pre-commencement |
| |
expenditure allocated to the pool for that period in accordance with |
| 25 |
| |
(b) | before determining, and adding to the pool, the amount of any pre- |
| |
commencement supplement claimed in respect of the period. |
| |
320 | Claims for pre-commencement supplement |
| |
(1) | Any claim for pre-commencement supplement in respect of a pre- |
| 30 |
commencement period must be made as a claim for the commencement |
| |
| |
(2) | Paragraph 74 of Schedule 18 to FA 1998 (company tax returns etc: time limit for |
| |
claims for group relief) applies in relation to a claim for pre-commencement |
| |
supplement as it applies in relation to a claim for group relief. |
| 35 |
Post-commencement supplement |
| |
321 | Supplement in respect of a post-commencement period |
| |
(1) | A qualifying company which incurs a ring fence loss (see section 323) in any |
| |
post-commencement period may claim supplement under this section (“post- |
| |
commencement supplement”) in respect of— |
| 40 |
| |
|
| |
|
| |
|
(b) | any subsequent accounting period in which it carries on its ring fence |
| |
| |
(2) | Any post-commencement supplement allowed on a claim in respect of a post- |
| |
commencement period is to be treated for the purposes of the Corporation Tax |
| |
Acts (other than the post-commencement supplement provisions or Part 4 of |
| 5 |
Schedule 19B to ICTA) as if it were a loss— |
| |
(a) | which is incurred in carrying on the ring fence trade in that period, and |
| |
(b) | which falls in whole to be used under section 45 (carry forward of trade |
| |
loss against subsequent trade profits) to reduce trading income from |
| |
the ring fence trade in succeeding accounting periods. |
| 10 |
(3) | Paragraph 74 of Schedule 18 to FA 1998 (company tax returns etc: time limit for |
| |
claims for group relief) applies in relation to a claim for post-commencement |
| |
supplement as it applies in relation to a claim for group relief. |
| |
(4) | In this Chapter “the post-commencement supplement provisions” means this |
| |
section and sections 322 to 329. |
| 15 |
322 | Amount of post-commencement supplement for a post-commencement |
| |
| |
(1) | The amount of the post-commencement supplement for any post- |
| |
commencement period in respect of which a claim under section 321 is made |
| |
is the relevant percentage for that period of the reference amount for that |
| 20 |
| |
(2) | If the post-commencement period is a period of less than 12 months, the |
| |
amount of the supplement for the period (apart from this subsection) is to be |
| |
| |
(3) | Sections 325 to 329 have effect for the purpose of determining the reference |
| 25 |
amount for a post-commencement period. |
| |
| |
| |
(a) | in any post-commencement period (“the period of the loss”) a |
| |
qualifying company carrying on a ring fence trade incurs a loss in the |
| 30 |
| |
(b) | some or all of the loss falls to be used under section 45 (carry forward |
| |
of trade loss against subsequent trade profits) to reduce trading income |
| |
from the trade in succeeding accounting periods, |
| |
| so much of the loss as falls to be so used is a “ring fence loss” of the company. |
| 35 |
(2) | In determining for the purposes of the post-commencement supplement |
| |
provisions how much of a loss incurred in a ring fence trade falls to be used as |
| |
mentioned in subsection (1)(b), the following assumptions are to be made. |
| |
(3) | The first assumption is that every claim is made that could be made by the |
| |
company under section 37 (relief for trade losses against total profits) to deduct |
| 40 |
losses incurred in the ring fence trade from ring fence profits of earlier post- |
| |
| |
(4) | The second assumption is that (where appropriate) section 42 (ring fence |
| |
trades: further extension of period for relief) applies in relation to every such |
| |
| 45 |
|
| |
|
| |
|
(5) | This section is subject to section 324 (special rule for straddling periods). |
| |
(6) | This section has effect for the purposes of the post-commencement supplement |
| |
| |
324 | Special rule for straddling periods |
| |
(1) | This section applies if the period of the loss is the deemed accounting period |
| 5 |
under section 309(3) beginning on 1 January 2006 (“the deemed accounting |
| |
| |
(2) | The amount of ring fence loss in the deemed accounting period is determined |
| |
| |
| 10 |
| Calculate so much of the ring fence loss in the straddling period as, for the |
| |
purposes of Part 4 of Schedule 19B to ICTA, is attributable to qualifying E&A |
| |
allowances for the straddling period. |
| |
| The amount given by this step is “the qualifying Schedule 19B amount”. |
| |
| 15 |
| Calculate so much of the ring fence loss in the straddling period as is |
| |
attributable to allowances for the straddling period under Part 6 of CAA 2001 |
| |
in respect of relevant expenditure. |
| |
| For the purposes of this step “relevant expenditure” means expenditure |
| |
incurred by the company on or after 1 January 2006 which, but for that fact, |
| 20 |
would be qualifying E&A expenditure for the purposes of Schedule 19B to |
| |
| |
| For the purposes of this step a ring fence loss is attributable to those allowances |
| |
so far as the amount of the loss (less the qualifying Schedule 19B amount) does |
| |
not exceed the amount of those allowances for that period. |
| 25 |
| The amount given by this step is “the amount of the post-1 January 2006 E&A |
| |
| |
| |
| Deduct the qualifying Schedule 19B amount and the amount of the post-1 |
| |
January 2006 E&A allowances from the amount of the ring fence loss in the |
| 30 |
| |
| |
| Apportion the remaining amount of that loss (if any) to the deemed accounting |
| |
period in proportion to the number of days in the deemed accounting period |
| |
that fall in the straddling period. |
| 35 |
| The amount given by this step is “the amount of the apportioned loss” |
| |
| |
| The amount of the ring fence loss in the deemed accounting period is the |
| |
amount of the apportioned loss plus the amount of the post-1 January 2006 |
| |
| 40 |
(3) | In this section “the straddling period”, in relation to a qualifying company, |
| |
means an accounting period of the company— |
| |
(a) | beginning before 1 January 2006, and |
| |
(b) | ending on or after that date, |
| |
|
| |
|
| |
|
| disregarding section 309(3). |
| |
(4) | In this section references to the ring fence loss in the straddling period are to |
| |
that loss determined on the assumption that the straddling period is the period |
| |
of the loss for the purposes of section 323. |
| |
(5) | This section has effect for the purposes of the post-commencement supplement |
| 5 |
| |
325 | The pool of ring fence losses and the pool of non-qualifying Schedule 19B |
| |
| |
(1) | For the purpose of determining the amount of any post-commencement |
| |
supplement, a qualifying company is to be taken at all times in its post- |
| 10 |
commencement periods to have a continuing mixed pool (the “ring fence |
| |
| |
(a) | the carried forward qualifying Schedule 19B amount (if any), |
| |
(b) | the company’s ring fence losses, and |
| |
(c) | post-commencement supplement. |
| 15 |
(2) | The ring fence pool continues even if the amount in it is nil. |
| |
(3) | For the purpose of determining the amount of any post-commencement |
| |
supplement, a qualifying company is also to be taken in its post- |
| |
commencement periods to have a non-qualifying pool consisting of the carried |
| |
forward non-qualifying Schedule 19B amount. |
| 20 |
(4) | But the non-qualifying pool ceases to exist when the amount in it is reduced to |
| |
| |
| |
“the carried forward qualifying Schedule 19B amount”, in relation to a |
| |
qualifying company, means the amount in its qualifying pool for the |
| 25 |
purposes of Part 4 of Schedule 19B to ICTA immediately before 1 |
| |
| |
“the carried forward non-qualifying Schedule 19B amount”, in relation to |
| |
a qualifying company, means the amount in its non-qualifying pool for |
| |
the purposes of Part 4 of Schedule 19B to that Act immediately before 1 |
| 30 |
| |
| |
(1) | The ring fence pool consists of— |
| |
(a) | the carried forward qualifying Schedule 19B amount (if any), |
| |
(b) | the company’s ring fence losses, allocated to the pool in accordance |
| 35 |
with subsection (2)(a), and |
| |
(c) | the company’s post-commencement supplement, allocated to the pool |
| |
in accordance with subsection (2)(b). |
| |
(2) | The allocation of ring fence losses and post-commencement supplement to the |
| |
| 40 |
(a) | the amount of a ring fence loss is added to the pool in the period of the |
| |
| |
|
| |
|
| |
|
(b) | if any post-commencement supplement is allowed on a claim in respect |
| |
of a post-commencement period, the amount of that supplement is |
| |
added to the pool in that period. |
| |
(3) | The amount in the ring fence pool is subject to reductions in accordance with |
| |
the following provisions of this Chapter. |
| 5 |
(4) | If a reduction in the amount in the ring fence pool falls to be made in any |
| |
accounting period, the reduction is to be made— |
| |
(a) | after the addition to the pool of the amount of any ring fence losses |
| |
allocated to the pool in that period in accordance with subsection (2)(a), |
| |
| 10 |
(b) | before determining, and adding to the pool, the amount of any |
| |
supplement claimed in respect of the period, |
| |
| and references to the amount in the pool are to be read accordingly. |
| |
(5) | In this section “the carried forward qualifying Schedule 19B amount”, in |
| |
relation to a qualifying company, means the amount in its qualifying pool for |
| 15 |
the purposes of Part 4 of Schedule 19B to ICTA immediately before 1 January |
| |
| |
327 | Reductions in respect of utilised ring fence losses |
| |
(1) | If one or more ring fence losses are used under section 45 (carry forward of |
| |
trade loss against subsequent trade profits) to reduce any profits of a post- |
| 20 |
commencement period, reductions are to be made in that period in accordance |
| |
| |
(2) | If the company has a non-qualifying pool, the amount in the non-qualifying |
| |
pool is to be reduced (but not below nil) by setting against it a sum equal to the |
| |
total amount used as mentioned in subsection (1). |
| 25 |
| |
(a) | any of that sum remains after being so set against the amount in the |
| |
| |
(b) | the company does not have a non-qualifying pool, |
| |
| the amount in the ring fence pool is to be reduced (but not below nil) by setting |
| 30 |
against it so much of that sum as so remains or (as the case may be) a sum equal |
| |
to the total amount used as mentioned in subsection (1). |
| |
(4) | If the post-commencement period is the deemed accounting period under |
| |
section 309(3) beginning on 1 January 2006 (“the deemed accounting period”), |
| |
the amount of the profits of the deemed accounting period is determined as |
| 35 |
| |
(5) | The amount of the profits of the straddling period is apportioned to the |
| |
deemed accounting period in proportion to the number of days in the deemed |
| |
accounting period that fall in the straddling period. |
| |
(6) | The apportioned amount is taken for the purposes of this section to be the |
| 40 |
amount of the profits of the deemed accounting period. |
| |
(7) | In this section “the straddling period”, in relation to a qualifying company, |
| |
means an accounting period of the company— |
| |
(a) | beginning before 1 January 2006, and |
| |
(b) | ending on or after that date, |
| 45 |
|
| |
|
| |
|
| disregarding section 309(3). |
| |
328 | Reductions in respect of unrelieved group ring fence profits |
| |
(1) | If there is an amount of unrelieved group ring fence profits for a post- |
| |
commencement period, reductions are to be made in that period in accordance |
| |
| 5 |
(2) | If, after making any reductions that fall to be made in accordance with section |
| |
327, the company does not have a non-qualifying pool, the remaining amount |
| |
in the ring fence pool is to be reduced (but not below nil) by setting against it a |
| |
sum equal to the aggregate of the amounts of unrelieved group ring fence |
| |
| 10 |
(3) | If, after making any reductions that fall to be made in accordance with section |
| |
327, the company has an amount in a non-qualifying pool, the amount in that |
| |
pool is to be reduced (but not below nil) by setting against it a sum equal to the |
| |
aggregate of the amounts of unrelieved group ring fence profits for the period. |
| |
(4) | If any of that sum remains after being so set against the amount in the non- |
| 15 |
qualifying pool, the remaining amount in the ring fence pool is to be reduced |
| |
(but not below nil) by setting against it so much of that sum as so remains. |
| |
(5) | For the purposes of this section references to the remaining amount in the ring |
| |
fence pool are references to so much (if any) of the amount in the ring fence |
| |
pool as remains after making any reductions that fall to be made in accordance |
| 20 |
| |
329 | The reference amount for a post-commencement period |
| |
For the purposes of section 322 the reference amount for a post-commencement |
| |
period is so much of the amount in the ring fence pool as remains after making |
| |
any reductions required by section 327 or 328. |
| 25 |
| |
Supplementary charge in respect of ring fence trades |
| |
330 | Supplementary charge in respect of ring fence trades |
| |
(1) | If a company carries on a ring fence trade in an accounting period, a sum equal |
| |
to 20% of its adjusted ring fence profits for that period is to be charged on the |
| 30 |
company as if it were an amount of corporation tax chargeable on the |
| |
| |
(2) | A company’s “adjusted ring fence profits” for an accounting period are the |
| |
amount which, on the assumption mentioned in subsection (3), would be |
| |
determined for that period as the profits of the company’s ring fence trade |
| 35 |
chargeable to corporation tax. |
| |
(3) | The assumption is that financing costs are left out of account in calculating— |
| |
(a) | the amount of the profits or loss of any ring fence trade of the company |
| |
for an accounting period, and |
| |
(b) | if for any such period the whole or part of any loss relief is surrendered |
| 40 |
to the company in accordance with section 305(1), the amount of that |
| |
| |
|
| |
|
| |
|
(4) | See also section 331 (meaning of financing costs etc). |
| |
(5) | This Chapter is subject to Chapter 7 (which contains provision about the |
| |
reduction of the supplementary charge for certain new oil fields). |
| |
331 | Meaning of “financing costs” etc |
| |
(1) | This section applies for the purposes of section 330. |
| 5 |
(2) | “Financing costs” means the costs of debt finance. |
| |
(3) | In calculating the costs of debt finance for an accounting period the matters to |
| |
be taken into account include— |
| |
(a) | any costs giving rise to debits in respect of debtor relationships of the |
| |
company under Part 5 of CTA 2009 (loan relationships), other than |
| 10 |
debits in respect of exchange losses from such relationships, |
| |
(b) | any exchange gain or loss from a debtor relationship of the company in |
| |
relation to debt finance, |
| |
(c) | any credit or debit falling to be brought into account in accordance with |
| |
Part 7 of CTA 2009 (derivative contracts) in relation to debt finance, |
| 15 |
(d) | the financing cost implicit in a payment under a finance lease, |
| |
(e) | if the company is the lessee under a long funding operating lease, the |
| |
amount deductible in respect of payments under the lease in |
| |
calculating the profits of the lessee for corporation tax purposes (after |
| |
first making against any such amount any reductions falling to be made |
| 20 |
as a result of section 379 (lessee under long funding operating lease)), |
| |
| |
(f) | any other costs arising from what would be considered in accordance |
| |
with generally accepted accounting practice to be a financing |
| |
| 25 |
(4) | If an amount representing the whole or part of a payment falling to be made by |
| |
| |
(a) | falls (or would fall) to be treated as a finance charge under a finance |
| |
lease for the purposes of accounts which relate to that company and one |
| |
or more other companies and are prepared in accordance with |
| 30 |
generally accepted accounting practice, but |
| |
(b) | is not so treated in the accounts of the company, |
| |
| the amount is to be treated as a financing cost within subsection (3)(d). |
| |
| |
(a) | in calculating the adjusted ring fence profits of a company for an |
| 35 |
accounting period, an amount falls to be left out of account as a result |
| |
of subsection (3)(d), but |
| |
(b) | the whole or any part of that amount is repaid, |
| |
| the repayment is also to be left out of account in calculating the adjusted ring |
| |
fence profits of the company for any accounting period. |
| 40 |
(6) | In this section “finance lease” means any arrangements which— |
| |
(a) | provide for an asset to be leased or otherwise made available by a |
| |
person to another person (“the lessee”), and |
| |
(b) | under generally accepted accounting practice— |
| |
|
| |
|