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House of Commons

Session 2009 - 10 Internet Publications Other Bills before Parliament

Corporation Tax Bill

Corporation Tax Bill
[AS AMENDED IN JOINT COMMITTEE]
The Bill is divided into four volumes. Volume I contains Clauses 1 to 357. Volume
II contains Clauses 358 to 751. Volume III contains Clauses 752 to 1185. Volume IV
contains the Schedules to the Bill.
Contents
Part 1
Introduction
1    Overview of Act
Part 2
Calculation of liability in respect of profits
Chapter 1
Introduction
2    Overview of Part
Chapter 2
Rates at which corporation tax on profits charged
3    Corporation tax rates
Chapter 3
Calculation of amount to which rates applied
4    Amount of profits to which corporation tax rates applied
Chapter 4
Currency
The currency to be used in tax calculations
5    Basic rule: sterling to be used
6    UK resident company operating in sterling and preparing accounts in another
currency
Bill 43                                                                                                  54/5
Corporation Tax Bill ii
7    UK resident company operating in currency other than sterling and
preparing accounts in another currency
8    UK resident company preparing accounts in currency other than sterling
9    Non-UK resident company preparing return of accounts in currency other
than sterling
Translating amounts into other currencies
10    The equivalent in another currency of a sterling amount
11    Sterling equivalents: basic rule
12    Sterling equivalents: carried-back amounts
13    Sterling equivalents: carried-forward amounts
Adjustment of sterling losses
14    Carried-back amounts
15    Carried-forward amounts
Interpretation
16    Sections 13(2) and 15(5): profit against which carried-forward amount to be
set off
17    Interpretation of Chapter
Part 3
Companies with small profits
The small profits rate
18    Profits charged at the small profits rate
Marginal relief
19    Marginal relief
20    Company with only ring fence profits
21    Company with ring fence profits and other profits
22    The ring fence amount
23    The remaining amount
The lower limit and the upper limit
24    The lower limit and the upper limit
25    Associated companies
26    Section 25(3): treatment of certain non-trading companies
27    Attribution to persons of rights and powers of their partners
28    Associated companies: fixed-rate preference shares
29    Association through a loan creditor
30    Association through a trustee
Supplementary
31    Power to obtain information
32    Meaning of “augmented profits”
Corporation Tax Bill iii
33    Interpretation of section 32(2) and (3)
34    Close investment-holding companies
Part 4
Loss relief
Chapter 1
Introduction
35    Overview of Part
Chapter 2
Trade losses
Introduction
36    Introduction to Chapter
Trade loss relief against total profits
37    Relief for trade losses against total profits
38    Limit on deduction if accounting period falls partly within 12 month period
39    Terminal losses: extension of periods for which relief may be given
40    Ring fence trades: extension of periods for which relief may be given
41    Sections 39 and 40: transfers of trade to obtain relief
42    Ring fence trades: further extension of period for relief
43    Claim period in case of ring fence or mineral extraction trades
44    Trade must be commercial or carried on for statutory functions
Carry forward of trade loss relief
45    Carry forward of trade loss against subsequent trade profits
46    Use of trade-related interest and dividends if insufficient trade profits
47    Registered industrial and provident societies
Restrictions on relief: farming or market gardening
48    Farming or market gardening
49    Reasonable expectation of profit
50    Cessation of trades
51    Companies treated as same person as individual
Restrictions on relief: commodity futures
52    Dealings in commodity futures
Other restrictions on relief
53    Leasing contracts and company reconstructions
54    Non-UK resident company: receipts of interest, dividends or royalties
Corporation Tax Bill iv
Chapter 3
Limited partners and members of limited liability partnerships
Introduction
55    Introduction to Chapter
Limited partners
56    Restriction on reliefs for limited partners
57    Meaning of “contribution to the firm”
58    Meaning of “limited partner”
Members of LLPs
59    Restriction on relief for members of LLPs
60    Meaning of “contribution to the LLP”
61    Unrelieved losses brought forward
Chapter 4
Property losses
UK property businesses
62    Relief for losses made in UK property business
63    Company with investment business ceasing to carry on UK property business
64    UK property business to be commercial or carried on for statutory functions
65    UK furnished holiday lettings business treated as trade
Overseas property businesses
66    Relief for losses made in overseas property business
67    Overseas property business to be commercial or carried on for statutory
functions
Chapter 5
Losses on disposal of shares
Share loss relief against income
68    Share loss relief
69    Eligibility conditions
70    Entitlement to claim
71    How relief works
72    Limit on deduction if accounting period falls partly within 12 month period
Shares: subscription and disposal
73    Subscription for shares
74    Disposals of new shares
75    Limits on relief
Corporation Tax Bill v
76    Disposal of shares forming part of mixed holding
77    Section 76: supplementary
Qualifying trading companies: the requirements
78    Qualifying trading companies
79    The trading requirement
80    Ceasing to meet trading requirement because of administration etc
81    The control and independence requirement
82    The qualifying subsidiaries requirement
83    The property managing subsidiaries requirement
84    The gross assets requirement
85    The unquoted status requirement
86    Power to amend requirements by Treasury order
Qualifying trading companies: supplementary
87    Relief after an exchange of shares for shares in another company
88    Substitution of new shares for old shares
89    Deemed time of issue for certain shares
Interpretation
90    Interpretation of Chapter
Chapter 6
Losses from miscellaneous transactions
91    Relief for losses from miscellaneous transactions
Chapter 7
Write-off of government investment
92    Loss relief to be reduced if government investment is written off
93    Groups of companies
94    Cases in which government investment is written off
95    Meaning of “carry-forward losses”
96    Interaction with other tax provisions
Part 5
Group relief
Chapter 1
Introduction
97    Introduction to Part
Corporation Tax Bill vi
Chapter 2
Surrender of company’s losses etc for an accounting period
Introduction
98    Overview of Chapter
Basic provisions about surrendering losses and other amounts
99    Surrendering of losses and other amounts
100    Meaning of “trading loss”
101    Meaning of “capital allowance excess”
102    Meaning of “UK property business loss”
103    Meaning of “management expenses”
104    Meaning of “non-trading loss on intangible fixed assets”
Restrictions on losses and other amounts that may be surrendered
105    Restriction on surrender of losses etc within section 99(1)(d) to (g)
106    Restriction on losses etc surrenderable by UK resident
107    Restriction on losses etc surrenderable by non-UK resident
108    Meaning of “non-UK profits”
109    Restriction on losses etc surrenderable by dual resident
110    Restriction on surrender of losses etc from alternative finance arrangements
Chapter 3
Surrenders made by non-UK resident company resident or trading in the EEA
Introduction
111    Overview of Chapter
112    EEA related definitions
Basic provisions about surrendering losses and other amounts
113    Steps to determine extent to which loss etc can be surrendered
Conditions that must be met
114    The equivalence condition
115    The EEA tax loss condition: companies resident in EEA territory
116    The EEA tax loss condition: companies not resident in EEA territory
117    The qualifying loss condition: general
118    The qualifying loss condition: relief for current and previous periods
119    The qualifying loss condition: relief for future periods
120    The qualifying loss condition: non-UK tax relief in another territory
121    The precedence condition
Other rules, assumptions and exclusions
122    Assumptions to be made in recalculating EEA amount
123    Assumptions as to UK residence
Corporation Tax Bill vii
124    Assumptions as to places in which activities carried on
125    Assumptions as to accounting periods
126    Assumptions in relation to capital allowances
127    Amounts excluded because of certain arrangements
128    Rules for recalculating EEA amount
Chapter 4
Claims for group relief
Introduction
129    Overview of Chapter
Surrenderable amounts under Chapter 2
130    Group relief claims on amounts surrenderable under Chapter 2
131    The group condition
132    Consortium condition 1
133    Consortium conditions 2 and 3
134    Meaning of “UK related” company
Surrenderable amounts under Chapter 3
135    Group relief claims on amounts surrenderable under Chapter 3
136    The EEA group condition
Giving of group relief
137    Deduction from total profits
General limitation on amount of group relief to be given
138    Limitation on amount of group relief applying to all claims
139    Unused part of the surrenderable amounts
140    Unrelieved part of claimant company’s available total profits
141    Sections 139 and 140: supplementary
142    Meaning of “the overlapping period”
Limitations on group relief if claim based on consortium condition 1, 2 or 3
143    Condition 1: surrendering company owned by consortium
144    Condition 1: claimant company owned by consortium
145    Conditions 2 and 3: limitations in sections 143 and 144
146    Conditions 2 and 3: companies in link company’s group
147    Conditions 1 and 2: surrenderable amounts including trading loss
148    Conditions 1 and 2: surrendering company in group of companies
149    Conditions 1 and 3: claimant company in group of companies

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