Corporation Tax Bill

House of Commons

Session 2009 - 10
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Other Bills before Parliament

Corporation Tax Bill

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
646

(b)
in subsection (5) for “section 416 of ICTA” substitute “sections 450
and 451 of CTA 2010”, and
(c)
in subsection (7) for “section 254 of ICTA” substitute “section 1115 of
CTA 2010”.
507
In section 332 (minor definitions etc) in the definition of “director” for
5
“section 417(5) of ICTA” substitute “section 452 of CTA 2010”.
508
In section 340 (application and criteria for accreditation) after subsection (5)
insert—
“(5A)
Regulations under that paragraph may include provision for the
purposes of Part 7 of CTA 2010 in addition to provision made for the
10
purposes of this Part.”
509
In section 341 (terms and conditions of accreditation) after subsection (3)
insert—
“(3A)
Regulations under this section may include provision for the
purposes of Part 7 of CTA 2010 in addition to provision made for the
15
purposes of this Part.”
510
In section 346 (conditions to be met in relation to securities) in subsection (3)
for “Securities are not fully paid for the purposes of subsection (1)(b)”
substitute “For the purposes of subsection (1)(b), securities are not fully paid
for”.
20
511   (1)
Amend section 348 (CITR: tax relief certificates) as follows.
      (2)
In subsection (3)—
(a)
omit “which” where it first appears,
(b)
in paragraph (a) at the beginning insert “which”, and
(c)
in paragraph (b) for “paragraph 12 of Schedule 16 to FA 2002”
25
substitute “section 229 of CTA 2010”.
      (3)
In subsection (7)—
(a)
for “the amount” substitute “an amount”, and
(b)
for “takes effect” substitute “comes into force”.
512
In section 355 (securities or shares: no claim after disposal or excessive
30
receipts of value) in subsection (2) for “5” substitute “6”.
513   (1)
Amend section 356 (no claim after loss of accreditation by the CDFI) as
follows.
      (2)
In subsection (1) omit “(“the relevant time”)”.
      (3)
For subsection (2) substitute—
35
“(2)
To find the relevant tax year proceed under the rest of this section, in
which references to the time of accreditation ceasing are to the time
with effect from which the CDFI ceases to be accredited.
(3)
If the time of accreditation ceasing falls within the first year of the 5
year period, the relevant tax year is the year in which the investment
40
date fell.
(4)
In any other case the relevant tax year is—

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
647

(a)
the year in which fell the last anniversary of the investment
date before the time of accreditation ceasing, or
(b)
if the time of accreditation ceasing itself falls on an
anniversary of the investment date, the year in which that
anniversary falls.”
5
514   (1)
Amend section 361 (disposal of securities or shares during 5 year period) as
follows.
      (2)
In subsection (3) for “for” (before “a tax year”) substitute “in respect of”.
      (3)
In subsection (5) for “for” (before “any tax year”) substitute “in respect of”.
515
In section 363 (value received by investor during 6 year period: loans) in
10
subsection (5) after “means an amount” insert “of value”.
516
In section 364 (value received by investor during 6 year period: securities or
shares) in subsection (1)(d) omit “(“the excess”)”.
517
In section 365 (receipts of insignificant value to be added together) after
subsection (7) insert—
15
“(8)
This section is subject to section 368 (value received if there is more
than one investment).”
518
In section 368 (value received if more than one investment) in subsection
(1)(c) for “falls” substitute “is received”.
519
In section 369 (effect of receipt of value on future claims for CITR) after
20
subsection (4) insert—
“(5)
This section is subject to section 368 (value received if there is more
than one investment).”
520
In section 373 (information to be provided by the investor) in subsection
(1)(b) for “for” substitute “in respect of”.
25
521
In section 392(4) (loan to buy interest in close company)—
(a)
in the definition of “close investment-holding company”, for the
words from “has” to “relief)” substitute “is to be read in accordance
with section 34 of CTA 2010”, and
(b)
in the definition of “associated company” for “section 416 of ICTA”
30
substitute “section 449 of CTA 2010”.
522
In section 394(5) (meaning of “material interest” in section 393)—
(a)
in the definition of “control” for “has the meaning given by section
416(2) to (6) of ICTA” substitute “is to be read in accordance with
sections 450 and 451 of CTA 2010”, and
35
(b)
in the definition of “participator” for “section 417(1) of ICTA”
substitute “section 454 of CTA 2010”.
523
In section 395(6) (meaning of “associate” in section 394) in the definition of
“control” for “has the meaning given by section 416(2) to (6) of ICTA”
substitute “is to be read in accordance with sections 450 and 451 of CTA
40
2010”.
524
In section 413(5) (overview of Chapter) for the words from “this Act” to the
end substitute “this Act and Part 11 of CTA 2010.”

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
648

525
In section 426(7) (election by donor: gift treated as made in previous tax
year) for the words from “section 25(10)” to the end substitute “and sections
471 and 475 of CTA 2010 (charitable companies and eligible bodies: income
tax treated as paid etc)).”
526
In section 430(1)(d) (“charity” to include exempted bodies) for “Schedule 18
5
to FA 2002” substitute “Chapter 9 of Part 13 of CTA 2010”.
527
In section 432(2) (meaning of “qualifying investment”), in the definition of
““open-ended investment company” for “section 468A(2) to (4) of ICTA”
substitute “sections 613 and 615 of CTA 2010”.
528
In section 442(7)(b) (qualifying interests in land held jointly) for the words
10
from “given” to “land” substitute “given, because of the disposal of the
qualifying interest in land, under this Chapter and as a result of Chapter 3 of
Part 6 of CTA 2010”.
529
In section 443(5) (calculation of relievable amount where joint disposal of
interest in land) for “section 587B of ICTA” substitute “as a result of Chapter
15
3 of Part 6 of CTA 2010”.
530
In section 527(2)(a) for “section 214 of ICTA” substitute “section 1086(2) of
CTA 2010”.
531
In section 531(2A) (exemption for property income etc) for “section 121 of FA
2006” substitute “section 548 of CTA 2010”.
20
532   (1)
Amend section 550 (meaning of “relievable gift”) as follows.
      (2)
After “under” insert “or as a result of”.
      (3)
For paragraphs (b) and (c) substitute—
“(b)
Chapter 2 of Part 6 of CTA 2010 (certain payments to charity),
(c)
Chapter 3 of Part 6 of CTA 2010 (certain disposals to
25
charity),”.
533
In section 553(3)(b) (section 551: certain payments and benefits to be
ignored) for the words from “qualifying donation” to “of that section”
substitute “qualifying payment for the purposes of Chapter 2 of Part 6 of
CTA 2010 because of a failure of condition F in section 191(7) of that Act to
30
be met”.
534
In section 554(5)(a) (transactions: exceptions) for “section 587B of ICTA”
substitute “as a result of Chapter 3 of Part 6 of CTA 2010”.
535
In section 555(1) (donors: exceptions) for “of section 339(7AB) of ICTA”
substitute “given by section 200 of CTA 2010”.
35
536
In section 559(3) (securities which are approved charitable investments), in
the definition of “open-ended investment company”, for “section 468A(2) to
(4) of ICTA” substitute “sections 613 and 615 of CTA 2010”.
537
In section 576 (manufactured dividends on UK shares: Real Estate
Investment Trusts)—
40
(a)
in subsection (1)(b) for sub-paragraphs (i) and (ii) substitute—
“(i)
paid by a company UK REIT in respect of
profits or gains (or both) of the company’s
property rental business, or

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
649

(ii)
paid by the principal company of a group UK
REIT in respect of profits or gains (or both) of
members of the group as shown in the
financial statement under section 532(2)(b) of
CTA 2010 (statement of group’s property
5
rental business in UK).”,
(b)
in subsection (3) for “section 121 of FA 2006” substitute “section 548
of CTA 2010”, and
(c)
after subsection (4) insert—
“(5)
In subsection (1) “gains” includes chargeable gains.”
10
538   (1)
Amend section 577 (statements about manufactured dividends) as follows.
      (2)
In subsection (2) for paragraphs (a) and (b) substitute—
“(a)
paid by a company UK REIT in respect of profits or gains (or
both) of the company’s property rental business, or
(b)
paid by the principal company of a group UK REIT in respect
15
of profits or gains (or both) of members of the group as
shown in the financial statement under section 532(2)(b) of
CTA 2010 (statement of group’s property rental business in
UK).”
      (3)
After subsection (2) insert—
20
“(2A)
In subsection (2) “gains” includes chargeable gains.”
      (4)
In subsection (6)(a) for “paragraph 2(3)(b) of Schedule 23A to ICTA”
substitute “section 784(1) of CTA 2010”.
      (5)
In subsection (8)(b) for “paragraph 2(6) to (8) of Schedule 23A to ICTA”
substitute “section 788 of CTA 2010”.
25
539
In section 591(1) (interpretation of other terms used in Chapter)—
(a)
omit the definitions of “C (tax-exempt)” and “G (property rental
business)”,
(b)
at the appropriate places insert the following definitions—
““company UK REIT” and “group UK REIT” have the
30
same meaning as in Part 12 of CTA 2010 (see sections
523(5) and 524(5) of that Act)),”, and
““property rental business” has the same meaning as in
Part 12 of CTA 2010 (see section 519 of that Act),”, and
(c)
in the definition of “group” and “principal company” for “section 134
35
of FA 2006” substitute “section 606 of CTA 2010”.
540
In section 597(1)(d) (deemed interest: cash collateral under stock lending
arrangements) for “section 840ZA of ICTA” substitute “section 1139 of CTA
2010”.
541   (1)
Amend section 602 (deemed manufactured payments: repos) as follows.
40
      (2)
In subsection (2)(b) for sub-paragraphs (i) and (ii) substitute—
“(i)
paid by a company UK REIT in respect of profits or
gains (or both) of the company’s property rental
business, or

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
650

(ii)
paid by the principal company of a group UK REIT in
respect of profits or gains (or both) of property rental
business of members of the group,”.
      (3)
After subsection (2) insert—
“(2A)
In subsection (2) “gains” includes chargeable gains.”
5
542   (1)
Amend section 603 (deemed deductions of tax) as follows.
      (2)
In subsection (2) for paragraphs (a) and (b) substitute—
“(a)
paid by a company UK REIT in respect of profits or gains (or
both) of the company’s property rental business, or
(b)
paid by the principal company of a group UK REIT in respect
10
of profits or gains (or both) of property rental business of
members of the group,”.
      (3)
After subsection (4) insert—
“(5)
In subsection (2) “gains” includes chargeable gains.”
543   (1)
Amend section 604 (deemed increase in repurchase price: price differences
15
under repos) as follows.
      (2)
In subsection (3) for paragraphs (a) and (b) substitute—
“(a)
paid by a company UK REIT in respect of profits or gains (or
both) of the company’s property rental business, or
(b)
paid by the principal company of a group UK REIT in respect
20
of profits or gains (or both) of property rental business of
members of the group,”.
      (3)
After subsection (5) insert—
“(6)
In subsection (3) “gains” includes chargeable gains.”
544
In section 606 (interpretation of Chapter)—
25
(a)
for subsection (2) substitute—
“(2)
“Company UK REIT” and “group UK REIT” have the same
meaning as in Part 12 of CTA 2010 (see sections 523(5) and
524(5) of that Act).”,
(b)
omit subsection (4),
30
(c)
in subsection (5) for the words from “has” to the end substitute “and
“principal company” have the same meaning as in Part 12 of CTA
2010 (see section 606 of that Act)”, and
(d)
after subsection (6) insert—
“(6A)
“Property rental business” has the same meaning as in Part 12
35
of CTA 2010 (see section 519 of that Act).”
545
In section 690(8) (receipt of assets of relevant company (circumstance E)) for
paragraph (b) substitute—
“(b)
“security” includes securities not creating or evidencing a
charge on assets, and”.
40
546
In section 691(4) (meaning of “relevant company” in sections 689 and 690)
for “has the meaning given by section 416(2) to (6) of ICTA (close companies:
meaning of “associated company” and “control”)” substitute “is to be read in

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
651

accordance with sections 450 and 451 of CTA 2010 (close companies:
meaning of “control”)”.
547
In section 772(1) (interpretation of Chapter) for “section 776 of ICTA”
substitute “Part 18 of CTA 2010 (transactions in land)”.
548
In section 809ZA (plant and machinery leases: capital receipts to be treated
5
as income) for subsection (3) substitute—
“(3)
If subsection (1)(a) applies, the income is treated as income for the
period of account in which there is first an obligation of the kind
mentioned there.
(4)
If subsection (1)(b) applies, the income is treated as income for the
10
period of account in which the capital payment is made.
(5)
For the meaning of “capital payment” and “relevant capital
payment”, see section 809ZE.
(6)
For the meaning of other expressions used in this section or section
809ZC, 809ZD or 809ZE, see section 809ZF.”
15
549
Omit section 809ZB (section 809ZA: interpretation).
550
In section 809ZC(1) (section 809ZA: lease of plant and machinery and other
property) for “section 809ZB(4)” substitute “section 809ZF(3)”.
551
After section 809ZD insert—
“809ZE
“Capital payment”, “relevant capital payment” etc
20
(1)
This section gives the meaning of “capital payment”, “relevant
capital payment” and references to payment for the purposes of
sections 809ZA to 809ZD and this section.
(2)
“Capital payment” means any payment except one which, if made to
the lessor—
25
(a)
would fall to be included in a calculation of the lessor’s
income for income tax purposes, or
(b)
would so fall but for section 148A of ITTOIA 2005 (rental
earnings under long funding finance lease).
(3)
A capital payment, in relation to a lease or relevant arrangement, is
30
“relevant” if condition A or B is met (but this is subject to subsections
(6) and (7)).
(4)
Condition A is that the capital payment is payable (or paid), directly
or indirectly, by or on behalf of the lessee to the lessor or another
person on the lessor’s behalf in connection with—
35
(a)
the grant, assignment, novation or termination of the lease, or
(b)
any provision of the lease or relevant arrangement (including
the variation or waiver of any such provision).
(5)
Condition B is that rentals payable under the lease are less than, or
payable later than, they might reasonably be expected to be if there
40
were no obligation to make the capital payment and it were not
made.
(6)
A capital payment is not “relevant” so far as it—

Corporation Tax Bill
Schedule 1 — Minor and consequential amendments
Part 2 — Other enactments
652

(a)
reduces the amount of expenditure incurred by the lessor for
the purposes of CAA 2001 in respect of the plant or
machinery in question or would reduce it but for section 536
of that Act (contributions not made by public bodies and not
eligible for tax relief), or
5
(b)
is compensation for loss resulting from damage to, or
damage caused by, the plant or machinery in question.
(7)
If—
(a)
a capital payment is an initial payment under a long funding
lease for the purposes of Part 2 of CAA 2001 (see section 70YI
10
of that Act), and
(b)
under section 61 of that Act (disposal events and disposal
values) the commencement of the term of the lease (as
defined in section 70YI of that Act) is an event that requires
the lessor to bring a disposal value into account,
15

the capital payment is only “relevant” so far as it exceeds the amount
that is the disposal value for the purposes of Part 2 of that Act.
(8)
References to payment include the provision of value by any means
other than the making of a payment.
(9)
Accordingly—
20
(a)
references to the making of a payment include the passing of
value by any other means, and
(b)
references to the amount of the payment include the value
passed.
809ZF
Further interpretation of section 809ZA etc
25
(1)
This section applies for the purposes of sections 809ZA to 809ZE and
this section.
(2)
“Lease” includes—
(a)
a licence, and
(b)
the letting of a ship or aircraft on charter or the letting of any
30
other asset on hire,

and “lessor” and “lessee” must be read accordingly.
(3)
“Lease of plant or machinery” includes a lease of plant or machinery
and other property, but does not include a lease to which subsection
(4) or (5) applies.
35
(4)
This subsection applies to a lease if any income attributable to it and
received by the lessor would be chargeable to tax under Part 3 of
ITTOIA 2005 (property income).
(5)
This subsection applies to a lease of plant or machinery if the lessor
has incurred on the plant or machinery what would be qualifying
40
expenditure within the meaning of Part 2 of CAA 2001 but for section
34A of that Act (expenditure on plant or machinery for long funding
leasing not qualifying expenditure).
(6)
“Relevant arrangement” means any agreement or arrangement
relating to a lease of plant or machinery, including one made before
45
the lease is entered into or after it has ended.