Corporation Tax Bill

House of Commons

Session 2009 - 10
Internet Publications
Other Bills before Parliament

Corporation Tax Bill

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
597

(b)
in paragraph (b) for “section 417(1) of the Taxes Act” substitute
“section 454 of CTA 2010”.
231
In section 117(1) (meaning of qualifying corporate bond) for the words from
“sub-paragraph (5)” to the end substitute “section 162 of CTA 2010 if for
paragraphs (a) to (c) of subsection (2) of that section there were substituted
5
the words “corporate bonds (within the meaning of section 117 of TCGA
1992)””.
232
In section 125(6) (shares in close company transferring assets at an
undervalue)—
(a)
in the definition of “associate” for “section 417 of the Taxes Act”
10
substitute “section 448 of CTA 2010”, and
(b)
in the definition of “participator” for “section 417 of the Taxes Act”
substitute “section 454 of CTA 2010”.
233
In section 125A(1) (effect of share loss relief)—
(a)
omit “section 573 of the Taxes Act or”, and
15
(b)
after “ITA 2007” insert “or Chapter 5 of Part 4 of CTA 2010”.
234
In section 135(4) (exchange of securities for those in another company) for
“section 832(1) of the Taxes Act” substitute “section 1119 of CTA 2010”.
235
In section 140L(1)(c)(i) (interpretation) for “section 832 of the Taxes Act”
substitute “section 1119 of CTA 2010”.
20
236
In section 151BA (CITR: identification of securities of shares on a disposal)
in subsection (10)(b)—
(a)
in sub-paragraph (i) for “Part 5 of Schedule 16 to the Finance Act
2002” substitute “Part 7 of CTA 2010”,
(b)
in sub-paragraph (ii)—
25
(i)
for “so attributable” substitute “attributable to securities,
shares or debentures”, and
(ii)
for “paragraph 26 of that Schedule” substitute “section 240 of
that Act”, and
(c)
in sub-paragraph (iii) for “paragraph 49 of that Schedule” substitute
30
“section 267 of that Act”.
237
In section 151BB (CITR: rights issues etc) in subsection (5)(b) for “paragraph
1(2) of Schedule 16 to the Finance Act 2002” substitute “section 219(2) of CTA
2010”.
238
In section 151C(5) (strips) for “section 840ZA of the Taxes Act” substitute
35
“section 1139 of CTA 2010”.
239
In section 151D(5) (corporate strips) for “section 840ZA of the Taxes Act”
substitute “section 1139 of CTA 2010”.
240
In section 161 (appropriations to and from stock) after subsection (5) insert—
“(6)
If—
40
(a)
any person is charged to corporation tax under section 818 of
CTA 2010 (charge to tax on gains from transactions in land)
on the realisation of a gain because the condition in section
819(2)(d) of that Act is met, and
(b)
the gain is calculated on the basis that any property was
45
appropriated as trading stock,

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
598


the property shall be treated on that basis also for the purposes of this
section.”
241
In section 165A(14) (meaning of “holding company” etc), in the definition of
“51% subsidiary”, for “section 838 of the Taxes Act” substitute “Chapter 3 of
Part 24 of CTA 2010”.
5
242   (1)
Amend section 170 (interpretation) as follows.
      (2)
In subsection (2)(c) for “the definition of “75 per cent subsidiary” in section
838 of the Taxes Act” substitute “section 1154(3) of CTA 2010 (meaning of
“75% subsidiary”)”.
      (3)
In subsection (6)(d) for “section 838(1)(a) of the Taxes Act” substitute
10
“section 1154(2) of CTA 2010”.
      (4)
For subsection (8) substitute—
“(8)
Chapter 6 of Part 5 of CTA 2010 (group relief: equity holders and
profits or assets available for distribution) applies for the purposes of
subsections (6) and (7) as if—
15
(a)
references to section 151(4)(a) and (b) of that Act were
references to subsections (6) and (7) above, and
(b)
sections 171(1)(b) and (3), 173, 174 and 176 to 178 of that Act
were omitted.”
243
In section 171(2)(da) (transfers within a group: general provisions) for the
20
words “to which Part 4 of the Finance Act 2006 applies” substitute “which is,
or is a member of, a UK REIT within the meaning of Part 12 of CTA 2010”.
244   (1)
Amend section 179 (company ceasing to be a member of group: post-
appointed day cases) as follows.
      (2)
In subsection (4) for the words from “and sections 403A and 403B of the
25
Taxes Act” to the end substitute “and sections 138 to 142 of CTA 2010 have
effect accordingly as if the actual circumstances were as they are treated as
having been”.
      (3)
In subsection (9A)—
(a)
for “Section 416(2) to (6) of the Taxes Act” substitute “Sections 450
30
and 451 of CTA 2010”,
(b)
for “it has” substitute “they have”, and
(c)
for “Part XI of that Act” substitute “Part 10 of CTA 2010”.
245
In section 184H(5)(b) (meaning of excluded arrangements) for “section
779(1) or (2) of the Taxes Act” substitute “section 835(1) or 836(1) of CTA
35
2010”.
246
In section 190(13) (tax recoverable from another group company or
controlling director)—
(a)
for the definition of “director” substitute—
““director”, in relation to a company, has the meaning
40
given by section 67(1) and (2) of ITEPA 2003 and
includes any person falling within section 452(1) of
CTA 2010;”, and
(b)
in the definition of “controlling director” for “section 416 of the Taxes
Act” substitute “sections 450 and 451 of CTA 2010”.
45

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
599

247   (1)
Amend section 192 (tax exempt distributions) as follows.
      (2)
In subsection (2) for “an exempt distribution which falls within section
213(3)(a) of the Taxes Act” substitute “a distribution which is exempt by
virtue of section 1076 of CTA 2010”.
      (3)
In subsection (5)—
5
(a)
in the definition of “chargeable payment” for “section 214(2) of the
Taxes Act” substitute “section 1088 of CTA 2010”, and
(b)
in the definition of “exempt distribution” for “section 213(2) of that
Act” substitute “section 1076 or 1077 of CTA 2010”.
248
In section 198(5)(b) (replacement of business assets used in connection with
10
oil fields) for the words from “either or both” to the end substitute “activities
falling within the definition of “oil-related activities” in section 16(2) of
ITTOIA 2005 or section 274 of CTA 2010”.
249
In section 212(1)(c) (annual deemed disposal of holdings of unit trusts etc)
for “to which Part 4 of the Finance Act 2006 applies” substitute “which is, or
15
is a member of, a UK REIT within the meaning of Part 12 of CTA 2010”.
250
After section 217C insert—
“Industrial and provident societies and co-operatives
217D
Disposal of assets on union, amalgamation or transfer of engagements
(1)
Subsection (2) applies if—
20
(a)
there is a union or amalgamation of two or more relevant
bodies or a transfer of engagements from one relevant body
to another, and
(b)
in the course of, or as part of, that union, amalgamation or
transfer there is a disposal of an asset by one relevant body to
25
another.
(2)
Both bodies are treated for the purposes of corporation tax on
chargeable gains as if the asset were acquired from the body making
the disposal for a consideration which is of the amount needed to
secure that on the disposal neither a gain nor a loss accrues to the
30
body making the disposal.
(3)
In this section “relevant body” means—
(a)
a society registered or treated as registered under the
Industrial and Provident Societies Act 1965 or the Industrial
and Provident Societies Act (Northern Ireland) 1969,
35
(b)
an SCE formed in accordance with Council Regulation (EC)
No 1435/2003 on the Statute for a European Co-Operative
Society, or
(c)
a UK agricultural or fishing co-operative, as defined in
section 1058 of CTA 2010.”
40
251
In section 221(2) (harbour authorities) for “within the meaning of section 518
of the Taxes Act” substitute “as defined by section 995 of CTA 2010”.
252
In section 228 (conditions for relief: supplementary) for subsection (10)

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
600

substitute—
“(10)
Chapter 6 of Part 5 of CTA 2010 (group relief: equity holders and
profits or assets available for distribution) applies for the purposes of
section 227(4) as if—
(a)
the trustees were a company, and
5
(b)
references to section 151(4)(a) and (b) of that Act were
references to section 227(4) above.”
253
In section 239(7) (employee trusts) for “in section 417(1) of the Taxes Act”
substitute “by section 454 of CTA 2010”.
254   (1)
Amend section 256 (charities) as follows.
10
      (2)
In subsection (1) omit “section 505(4) of the Taxes Act and”.
      (3)
After subsection (3) insert—
“(3A)
Subsection (4) below also applies if a charitable company has a non-
exempt amount under section 493 of CTA 2010 for an accounting
period.”
15
      (4)
For subsection (4) substitute—
“(4)
Gains accruing—
(a)
to the charitable trust in the year of assessment, or
(b)
to the charitable company in the accounting period,

are treated as being, and always having been, chargeable gains so far
20
as they are attributed to the non-exempt amount under section 256A
(in the case of a charitable trust) or section 256C (in the case of a
charitable company).”
      (5)
After subsection (6) insert—
“(7)
For restrictions on exemptions under Part 11 of CTA 2010 (charitable
25
companies etc) see section 492 of that Act.
(8)
In this section “charitable company” has the same meaning as in Part
11 of CTA 2010 (see section 467 of that Act).”
255
In the title to section 256A (attributing gains to the non-exempt amount)
after “amount” insert “: charitable trusts”.
30
256
In the title to section 256B (how gains are attributed to the non-exempt
amount) after “amount” insert “: charitable trusts”.
257
After section 256B insert—
“256C
Attributing gains to the non-exempt amount: charitable companies
(1)
This section applies if a charitable company has a non-exempt
35
amount under section 493 of CTA 2010 for an accounting period.
(2)
Attributable gains of the charitable company for the period may be
attributed to the non-exempt amount but only so far as the non-
exempt amount has not been used up.
(3)
The non-exempt amount can be used up (in whole or in part) by—
40
(a)
attributable gains being attributed to it under this section, or

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
601

(b)
attributable income being attributed to it under section 494 of
CTA 2010.
(4)
The whole of the non-exempt amount must be used up by—
(a)
attributable gains being attributed to the whole of it under
this section,
5
(b)
attributable income being attributed to the whole of it under
section 494 of CTA 2010, or
(c)
a combination of attributable gains being attributed to some
of it under this section and attributable income being
attributed to the rest of it under section 494 of CTA 2010.
10
(5)
In this section and section 256D a charitable company’s “attributable
income” and “attributable gains” for an accounting period have the
same meaning as in Part 11 of CTA 2010 (see section 493 of that Act).
(6)
In this section “charitable company” has the same meaning as in Part
11 of CTA 2010 (see section 467 of that Act).
15
256D
How gains are attributed to the non-exempt amount: charitable
companies
(1)
This section is about the ways in which attributable gains can be
attributed to a non-exempt amount under section 256C.
(2)
The charitable company may specify the attributable gains that are to
20
be attributed to the non-exempt amount.
(3)
A specification under subsection (2) is made by notice to an officer of
Revenue and Customs.
(4)
Subsection (6) applies if—
(a)
an officer of Revenue and Customs requires a charitable
25
company to make a specification under this section, and
(b)
the charitable company has not given notice under
subsection (3) of the specification before the end of the
required period.
(5)
The required period is 30 days beginning with the day on which the
30
officer made the requirement.
(6)
An officer of Revenue and Customs may determine the attributable
gains that are to be attributed to the non-exempt amount.
(7)
In this section “charitable company” has the same meaning as in Part
11 of CTA 2010 (see section 467 of that Act).”
35
258   (1)
Amend section 257 (gifts to charities etc) as follows.
      (2)
In subsection (1)(a) after “charity” insert “or a registered club”.
      (3)
In subsection (2A) for “section 587B of the Taxes Act” substitute “as a result
of Chapter 3 of Part 6 of CTA 2010”.
      (4)
In subsection (2B) for paragraphs (a) to (c) substitute—
40
“(a)
is reduced by the relievable amount within the meaning of
Chapter 3 of Part 8 of ITA 2007 if relief in relation to the
disposal is available only under that Chapter,

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
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(b)
is reduced by the relievable amount within the meaning of
Chapter 3 of Part 6 of CTA 2010 if relief in relation to the
disposal is available only as a result of that Chapter,
(c)
is reduced by the relievable amount within the meaning of
Chapter 3 of Part 8 of ITA 2007 if relief in relation to the
5
disposal is available both under that Chapter and as a result
of Chapter 3 of Part 6 of CTA 2010 because of section 442 of
ITA 2007 and section 214 of CTA 2010, or”.
      (5)
In subsection (2C) omit the definitions of “relevant amount” and “relievable
amount”.
10
      (6)
In subsection (3)—
(a)
after “is a charity,” insert “a registered club”, and
(b)
after “the charity”, in both places where it occurs, insert “, registered
club”.
      (7)
After subsection (4) insert—
15
“(5)
For the purposes of this section “registered club” has the same
meaning as in Chapter 9 of Part 13 of CTA 2010.”
259
In section 263B(7) (stock lending arrangements), in the definition of
“securities”, for the words from “means” to the end substitute “means UK
shares or overseas securities (within the meaning of Part 17 of CTA 2010: see
20
section 814 of that Act) or UK securities within the meaning of section 805 of
CTA 2010 (see section 806 of that Act)”.
260
In section 263E(1)(a) (structured finance arrangements) before “(disregard”
insert “or section 759 or 760 of CTA 2010”.
261   (1)
Amend section 271 (other miscellaneous exemptions) as follows.
25
      (2)
In subsection (3) for “section 519A of the Taxes Act” substitute “section 986
of CTA 2010”.
      (3)
In subsection (6)(b) for the words from “Association” to the end substitute
“association (in the sense that word has in section 469(1)(a) of CTA 2010)
which meets conditions A and B in that section (conditions for qualifying as
30
a scientific research association).”
262
In section 276(2)(d) (the territorial sea and the continental shelf) for “section
254(1) of the Taxes Act” substitute “section 1117(1) of CTA 2010”.
263
In section 286(3A)(b) (connected persons: interpretation) for “section 840 of
the Taxes Act” substitute “section 1124 of CTA 2010”.
35
264   (1)
Amend section 288 (interpretation) as follows.
      (2)
In subsection (1)—
(a)
in the definition of “close company” for “has the meaning given by
sections 414 and 415 of the Taxes Act” substitute “shall be construed
in accordance with Chapter 2 of Part 10 of CTA 2010 (see in particular
40
section 439)”,
(b)
in the definition of “control” for “section 416 of the Taxes Act”
substitute “sections 450 and 451 of CTA 2010”,
(c)
in the definition of “investment trust” for “section 842 of the Taxes
Act” substitute “section 1158 of CTA 2010”,
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Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
603

(d)
for the definition of “permanent establishment” substitute—
““permanent establishment”, in relation to a company,
is to be read in accordance with Chapter 2 of Part 24
of CTA 2010;”,
(e)
in the definition of “personal representatives” for “Chapter 3 of Part
5
10 of CTA 2009 (see section 968 of that Act)” substitute “the
Corporation Tax Acts (see section 1119 of CTA 2010)”,
(f)
in paragraph (b) of the definition of “UK property business” for the
words from “enactments” to the end substitute “Corporation Tax
Acts (see section 1119 of CTA 2010)”, and
10
(g)
at the appropriate place insert—
““CTA 2010” means the Corporation Tax Act 2010;”.
      (3)
In subsection (3A)—
(a)
in paragraph (a), after “217A,” insert “217D,”, and
(b)
omit paragraph (e).
15
265
In paragraph 7(3)(a) of Schedule 3 (assets held on 31 March 1982) for “section
254(1) of the Taxes Act” substitute “section 1117(1) of CTA 2010”.
266   (1)
Amend Schedule 5 (attribution of gains to settlors with interest in non-
resident or dual resident settlement) as follows.
      (2)
In paragraph 2—
20
(a)
in sub-paragraph (8)—
(i)
for “section 416 of the Taxes Act” substitute “sections 450 and
451 of CTA 2010”,
(ii)
for “section 416(6)” substitute “section 451(4) to (6) of CTA
2010”,
25
(b)
in sub-paragraph (9)—
(i)
for “section 416 of the Taxes Act” substitute “section 449 of
CTA 2010”,
(ii)
for “section 416(6)” substitute “section 451(4) to (6) of CTA
2010”, and
30
(c)
in sub-paragraph (10) for “section 417(1) of the Taxes Act” substitute
“section 454 of CTA 2010”.
      (3)
In paragraph 2A—
(a)
in sub-paragraph (8)—
(i)
for “section 416 of the Taxes Act” substitute “sections 450 and
35
451 of CTA 2010”,
(ii)
for “section 416(6)” substitute “section 451(4) to (6) of CTA
2010”,
(b)
in sub-paragraph (9)—
(i)
for “section 416 of the Taxes Act” substitute “section 449 of
40
CTA 2010”,
(ii)
for “section 416(6)” substitute “section 451(4) to (6) of CTA
2010”, and
(c)
in sub-paragraph (10) in the definition of “participator” for “section
417(1) of the Taxes Act” substitute “section 454 of CTA 2010”.
45
      (4)
In paragraph 8—
(a)
in sub-paragraph (8)—