|
| |
|
61 | Unrelieved losses brought forward |
| |
(1) | This section applies if— |
| |
(a) | a company (“the member company”) carries on a trade as a member of |
| |
an LLP at a time during an accounting period (“the current period”), |
| |
| 5 |
(b) | as a result of section 59, relief under section 37 or Part 5 (group relief) |
| |
has not been given for an amount of loss made in the trade by the |
| |
member company as a member of the LLP in a previous accounting |
| |
| |
(2) | For the purpose of determining the relief under section 37 or Part 5 to be given |
| 10 |
to any company, the amount of loss is treated as having been made by the |
| |
member company in the current period so far as it is not excluded by |
| |
| |
(3) | An amount of loss is excluded so far as— |
| |
(a) | under this section the amount has been treated as made by the member |
| 15 |
company in a previous accounting period, and |
| |
(b) | as a result of that, relief under section 37 or Part 5 has been given for the |
| |
amount or would have been given had a claim been made. |
| |
(4) | An amount of loss is also excluded so far as relief under the Corporation Tax |
| |
Acts has been given for the amount other than as a result of this section. |
| 20 |
| |
| |
| |
62 | Relief for losses made in UK property business |
| |
(1) | This section applies if, in an accounting period, a company carrying on a UK |
| 25 |
property business makes a loss in the business. |
| |
(2) | Relief for the loss is given to the company under this section. |
| |
(3) | The relief is given by deducting the loss from the company’s total profits of the |
| |
| |
(4) | Subsection (5) applies if— |
| 30 |
(a) | not all the loss can be deducted as mentioned in subsection (3), and |
| |
(b) | the company continues to carry on the UK property business in the next |
| |
| |
(5) | So far as the loss cannot be deducted, it— |
| |
(a) | is carried forward to the next accounting period, and |
| 35 |
(b) | is treated for the purposes of this section as a loss made by the company |
| |
in the UK property business in that period. |
| |
(6) | Relief under this section is subject to restriction or modification in accordance |
| |
with provisions of the Corporation Tax Acts. |
| |
|
| |
|
| |
|
63 | Company with investment business ceasing to carry on UK property business |
| |
(1) | This section applies if, in an accounting period, a company with investment |
| |
business (as defined in section 1218 of CTA 2009)— |
| |
(a) | ceases to carry on a UK property business or to be within the charge to |
| |
corporation tax in respect of such a business, but |
| 5 |
(b) | continues to be a company with investment business. |
| |
(2) | Subsection (3) applies if, as a result of the company ceasing to carry on the UK |
| |
property business or to be within the charge to corporation tax in respect of it, |
| |
an amount of loss made in carrying on that business cannot be carried forward |
| |
to the next accounting period for the purposes of section 62. |
| 10 |
| |
(a) | is, nevertheless, carried forward to the next accounting period, and |
| |
(b) | is treated for the purposes of Chapter 2 of Part 16 of CTA 2009 as an |
| |
expense of management deductible for that period or a succeeding |
| |
period in accordance with that Chapter. |
| 15 |
64 | UK property business to be commercial or carried on for statutory functions |
| |
(1) | Sections 62 and 63 apply to a UK property business only so far as it is carried |
| |
| |
(a) | on a commercial basis, or |
| |
(b) | in the exercise of functions conferred by or under an Act (including an |
| 20 |
Act of the Scottish Parliament). |
| |
(2) | A business (or part) is not carried on on a commercial basis unless it is carried |
| |
on with a view to making a profit or so as to afford a reasonable expectation of |
| |
| |
(3) | If during an accounting period there is a change in the way in which a business |
| 25 |
(or part) is carried on, it is treated as having been carried on throughout that |
| |
period in the way in which it is being carried on by the end of that period. |
| |
65 | UK furnished holiday lettings business treated as trade |
| |
(1) | This section applies if a company carries on a UK furnished holiday lettings |
| |
| 30 |
(2) | “UK furnished holiday lettings business” means a UK property business so far |
| |
as it consists of the commercial letting of furnished holiday accommodation |
| |
(within the meaning of Chapter 6 of Part 4 of CTA 2009). |
| |
(3) | For the purposes of this Part the company is treated as carrying on a single |
| |
| 35 |
(a) | which consists of every commercial letting of furnished holiday |
| |
accommodation comprised in the company’s UK furnished holiday |
| |
| |
(b) | in relation to which the profits are chargeable to corporation tax under |
| |
Chapter 2 of Part 3 of CTA 2009. |
| 40 |
(4) | Accordingly, sections 62 to 64 apply in relation to the company’s UK property |
| |
business as if the lettings mentioned in subsection (3)(a) were not included in it. |
| |
|
| |
|
| |
|
(5) | If there is a letting of accommodation only part of which is furnished holiday |
| |
accommodation, just and reasonable apportionments are to be made for the |
| |
purpose of determining what is comprised in the trade treated as carried on. |
| |
Overseas property businesses |
| |
66 | Relief for losses made in overseas property business |
| 5 |
(1) | This section applies if, in an accounting period, a company carrying on an |
| |
overseas property business makes a loss in the business. |
| |
(2) | Relief for the loss is given to the company under this section. |
| |
| |
(a) | the loss is carried forward to subsequent accounting periods, and |
| 10 |
(b) | the profits of the business of any such period are reduced by the loss so |
| |
far as it cannot be used under this paragraph to reduce the profits of the |
| |
business of an earlier period. |
| |
(4) | Relief under this section is subject to restriction or modification in accordance |
| |
with provisions of the Corporation Tax Acts. |
| 15 |
67 | Overseas property business to be commercial or carried on for statutory |
| |
| |
(1) | Section 66 applies to an overseas property business only so far as it is carried |
| |
| |
(a) | on a commercial basis, or |
| 20 |
(b) | in the exercise of functions conferred by or under an Act (including an |
| |
Act of the Scottish Parliament) or by or under the law of a territory |
| |
outside the United Kingdom. |
| |
(2) | A business (or part) is not carried on on a commercial basis unless it is carried |
| |
on with a view to making a profit or so as to afford a reasonable expectation of |
| 25 |
| |
(3) | If during an accounting period there is a change in the way in which a business |
| |
(or part) is carried on, it is treated as having been carried on throughout that |
| |
period in the way in which it is being carried on by the end of that period. |
| |
| 30 |
Losses on disposal of shares |
| |
Share loss relief against income |
| |
| |
(1) | A company which has subscribed for shares in a qualifying trading company |
| |
is eligible for relief under this Chapter (“share loss relief”) if— |
| 35 |
(a) | it incurs an allowable loss (for the purposes of corporation tax on |
| |
chargeable gains) on the disposal of the shares in any accounting |
| |
| |
(b) | it meets the eligibility conditions (see section 69). |
| |
|
| |
|
| |
|
(2) | Subsection (1) applies only if the disposal of the shares is— |
| |
(a) | by way of a bargain made at arm’s length, |
| |
(b) | by way of a distribution in the course of dissolving or winding up the |
| |
qualifying trading company, |
| |
(c) | a disposal within section 24(1) of TCGA 1992 (entire loss, destruction, |
| 5 |
dissipation or extinction of asset), or |
| |
(d) | a deemed disposal under section 24(2) of that Act (claim that value of |
| |
the asset has become negligible). |
| |
(3) | Subsection (1) does not apply to any allowable loss incurred on the disposal |
| |
| 10 |
(a) | the shares are the subject of an exchange or arrangement of the kind |
| |
mentioned in section 135 or 136 of TCGA 1992 (company |
| |
reconstructions etc), and |
| |
(b) | because of section 137 of that Act, the exchange or arrangement |
| |
involves a disposal of the shares. |
| 15 |
(4) | For the meaning of “qualifying trading company”, see section 78. |
| |
69 | Eligibility conditions |
| |
(1) | These are the eligibility conditions mentioned in section 68(1)(b) that a |
| |
company which has subscribed for shares in a qualifying trading company |
| |
must meet to be eligible for share loss relief on the disposal of the shares. |
| 20 |
(2) | Condition A is that the subscribing company (“the investor”) is an investment |
| |
company on the date of the disposal of the shares (“the disposal date”). |
| |
(3) | Condition B is that the investor has been an investment company— |
| |
(a) | for a continuous period of 6 years ending on the disposal date, or |
| |
(b) | for a shorter continuous period ending on the disposal date and has not |
| 25 |
before the beginning of that period been a trading company or an |
| |
excluded company (see section 90(1)). |
| |
(4) | Condition C is that the investor was not associated with, or a member of the |
| |
same group as, the qualifying trading company at any time during the |
| |
| 30 |
(a) | beginning with the date when the investor subscribed for the shares, |
| |
| |
(b) | ending with the disposal date. |
| |
(5) | For the purposes of condition C, two companies are associated with each other |
| |
| 35 |
(a) | one controls the other, or |
| |
(b) | both are under the control of the same person or persons. |
| |
(6) | Sections 450 and 451 (which contain provision as to when a person is to be |
| |
taken to have control of a company) apply for the purposes of subsection (5). |
| |
| 40 |
(1) | This section applies where a company is eligible for share loss relief. |
| |
(2) | The company may make a claim for the loss to be deducted in calculating for |
| |
corporation tax purposes the company’s income— |
| |
|
| |
|
| |
|
(a) | for the accounting period in which the loss is incurred, and |
| |
(b) | if the claim so requires, for previous accounting periods so far as they |
| |
fall (wholly or partly) within the period of 12 months ending |
| |
immediately before the beginning of the accounting period in which |
| |
| 5 |
(3) | The company may make a claim under subsection (2)(b) for any accounting |
| |
period only if the company was an investment company throughout that |
| |
| |
(4) | A claim for share loss relief must be made before the end of the period of two |
| |
years after the end of the accounting period in which the loss is incurred. |
| 10 |
| |
(1) | This subsection explains how deductions in respect of share loss relief claimed |
| |
by a company under section 70 are to be made. |
| |
| |
| Deduct the loss in calculating the company’s income for the accounting period |
| 15 |
in which the loss is incurred. |
| |
| |
| If not all of the loss can be deducted at Step 1, deduct the remaining loss in |
| |
calculating the company’s income for any accounting period falling (wholly or |
| |
partly) within the 12 month period that ends immediately before the beginning |
| 20 |
of the accounting period in which the loss is incurred. |
| |
(2) | The amount of a deduction to be made at Step 2 for any accounting period is |
| |
the amount of the loss so far as it cannot be deducted under subsection (1) for |
| |
a subsequent accounting period. |
| |
(3) | Subsection (1) is subject to sections 72, 74(5) and 75 (which set limits on the |
| 25 |
amount of share loss relief that may be obtained in particular cases). |
| |
(4) | A deduction at Step 2 from the income of an accounting period may be made |
| |
only after all other deductions have been made from the income for that period |
| |
in respect of share loss relief given for an earlier loss. |
| |
(5) | Deductions made on the basis of relief claimed under Part 7 of Schedule 15 to |
| 30 |
FA 2000 (relief for losses on disposal of shares to which investment relief is |
| |
attributable) must, in accordance with paragraph 70 of that Schedule, be made |
| |
before making deductions for share loss relief. |
| |
(6) | A claim for share loss relief does not affect any claim for a deduction under |
| |
TCGA 1992 for so much of the allowable loss as is not deducted under |
| 35 |
| |
72 | Limit on deduction if accounting period falls partly within 12 month period |
| |
(1) | This section applies if an accounting period falls partly within the period of 12 |
| |
months ending immediately before the beginning of the accounting period in |
| |
which the loss is incurred. |
| 40 |
(2) | The amount of the deduction under Step 2 in section 71(1) for the accounting |
| |
period is not to exceed an amount equal to the overlapping proportion of the |
| |
company’s income of that period. |
| |
|
| |
|
| |
|
(3) | The overlapping proportion is the same as the proportion that the part of the |
| |
accounting period falling within the 12 month period mentioned in subsection |
| |
(1) bears to the whole of the accounting period. |
| |
Shares: subscription and disposal |
| |
73 | Subscription for shares |
| 5 |
(1) | This section has effect for the purposes of this Chapter. |
| |
(2) | A company subscribes for shares in another company if they are issued to the |
| |
company by the other company in consideration of money or money’s worth. |
| |
| |
(a) | a company has subscribed for, or is treated under this subsection as |
| 10 |
having subscribed for, any shares, and |
| |
(b) | any corresponding bonus shares are subsequently issued to the |
| |
| |
| the company is treated as having subscribed for the bonus shares. |
| |
| 15 |
(a) | a company subscribed for any shares (“the original shares”) on a |
| |
| |
(b) | any corresponding bonus shares are treated as having been subscribed |
| |
for by the company under subsection (3), |
| |
| the company is treated as having subscribed for the bonus shares on that date. |
| 20 |
74 | Disposals of new shares |
| |
(1) | This section applies if— |
| |
(a) | a company disposes of shares (“the new shares”), and |
| |
(b) | the new shares are, by virtue of section 127 of TCGA 1992 |
| |
(reorganisation etc treated as not involving disposal), identified with |
| 25 |
other shares (“the old shares”) previously held by the company. |
| |
(2) | The company is not eligible for share loss relief on the disposal of the new |
| |
shares unless condition A or B is met. |
| |
| This is subject to section 87(3). |
| |
(3) | Condition A is that the company would have been eligible for share loss relief |
| 30 |
on a disposal of the old shares— |
| |
(a) | if the company had incurred an allowable loss in disposing of them by |
| |
way of a bargain made at arm’s length on the occasion of the disposal |
| |
that would have occurred but for section 127 of TCGA 1992, and |
| |
(b) | where applicable, if this Chapter had then been in force. |
| 35 |
(4) | Condition B is that the company gave for the new shares consideration in |
| |
money or money’s worth other than consideration of the kind mentioned in |
| |
paragraph (a) or (b) of section 128(2) of TCGA 1992 (“new consideration”). |
| |
(5) | If the company relies on condition B, the amount of share loss relief on the |
| |
disposal of the new shares must not exceed the amount or value of the new |
| 40 |
consideration taken into account as a deduction in calculating the amount of |
| |
the loss incurred on the disposal. |
| |
|
| |
|