Corporation Tax Bill
viii
Chapter 5
Subsidiaries, groups and consortiums
Introduction
150
Overview of Chapter
Explanations of terms
151
Meaning of “75% subsidiary” and “90% subsidiary”
152
Groups of companies
153
Companies owned by consortiums and members of consortiums
Arrangements for transfers of companies
154
Arrangements for transfer of member of group of companies etc
155
Arrangements for transfer of company owned by consortium etc
156
Sections 154 and 155: supplementary
Chapter 6
Equity holders and profits or assets available for distribution
157
Introduction to Chapter
Equity holders
158
Meaning of “equity holder”
159
Use of relevant company’s assets
160
Meaning of “ordinary shares”
161
Meaning of “restricted right to dividends”
162
Meaning of “normal commercial loan”
163
Normal commercial loans: company’s results or value of assets
164
Sections 160 and 162: supplementary
Company’s entitlement to profits or assets available for distribution: basic provisions
165
Proportion of profits available for distribution to which company is entitled
166
Proportion of assets available for distribution to which company is entitled
167
Profits or assets available for distribution and entitlement: supplementary
168
Meaning of “the relevant accounting period”
Company’s entitlement to profits or assets available for distribution: supplementary
169
Application and interpretation of sections 170 to 182
170
Shares or securities with limited rights
171
Shares or securities with temporary rights
172
Company A’s proportion if shares etc have temporary rights
173
Cases in which option arrangements are in place
174
Company A’s proportion if option arrangements in place
175
Cases in which both sections 170 and 172 apply
ix
176
Cases in which both sections 170 and 174 apply
177
Cases in which both sections 172 and 174 apply
178
Cases in which sections 170, 172 and 174 all apply
179
Cases in which surrendering or claimant company is non-UK resident
180
Company A’s proportion if non-UK resident involved
181
Assumptions to be applied if non-UK resident company involved
182
Assets etc referable to UK trade
Chapter 7
Miscellaneous provisions and interpretation of Part
Miscellaneous
183
Payments for group relief
184
References to “allowance” in CAA 2001
Interpretation
185
“Trading company” and “holding company”
186
When activities of a company are double taxation exempt
187
“Non-UK tax”
188
Other definitions
Part 6
Charitable donations relief
Chapter 1
Nature of relief
189
Relief for qualifying charitable donations
190
Qualifying charitable donations: meaning
Chapter 2
Certain payments to charity
Qualifying payments
191
192
Condition as to repayment
193
Associated acquisition etc
194
Distributions
195
Associated benefits
196
Associated benefits: meaning
197
Restrictions on associated benefits
198
Payments and benefits linked to periods of less than 12 months
Payment attributed to earlier period
199
Payment attributed to earlier accounting period
x
200
Company wholly owned by a charity
201
Associated persons
202
“Charity”
Chapter 3
Certain disposals to charity
Amounts treated as qualifying charitable donations
203
Certain disposals of investments
204
Meaning of qualifying investment
205
Meaning of qualifying interest in land
206
The relievable amount
207
Incidental costs of making disposal
208
Consideration
Value of net benefit to charity
209
210
Market value of qualifying investments
211
Meaning of “disposal-related obligation”
212
Meaning and amount of “disposal-related liability”
Special provisions about qualifying interests in land
213
Certificate required from charity
214
Qualifying interests in land held jointly
215
Calculation of relievable amount etc where joint disposal of interest in land
216
Disqualifying events
217
Part 7
Community investment tax relief
CITR
218
Meaning of “CITR”
219
Eligibility for CITR
220
Form and amount of CITR
221
Meaning of “making an investment”
222
Determination of “the invested amount”
xi
223
Meaning of “the 5 year period” and “the investment date”
224
Overview of other Chapters of Part
Qualifying investments
225
Qualifying investments: introduction
226
Conditions to be met in relation to loans
227
Conditions to be met in relation to securities
228
Conditions to be met in relation to shares
229
Tax relief certificates
230
No pre-arranged protection against risks
General conditions
231
No control of CDFI by investor
232
Investor must have beneficial ownership
233
Investor must not be accredited
234
No acquisition of share in partnership
235
No tax avoidance purpose
Chapter 4
Limitations on claims and attribution
Limitations on claims
236
Loans: no claim after disposal or excessive repayments or receipts of value
237
Securities or shares: no claim after disposal or excessive receipts of value
238
No claim after loss of accreditation by the CDFI
239
Accreditation of investor
Attribution
240
Attribution: general
241
Attribution: bonus shares
Withdrawal or reduction of CITR
242
Disposals
243
Disposal of loan during 5 year period
244
Disposal of securities or shares during 5 year period
xii
Repayment of loans
245
Repayment of loan capital during 5 year period
Receipts of value
246
Value received by investor during 6 year period: loans
247
Value received by investor during 6 year period: securities or shares
248
Receipts of insignificant value to be added together
249
When value is received
250
The amount of value received
251
Value received if there is more than one investment
252
Effect of receipt of value on future claims
253
Receipts of value by or from connected persons
CITR not due
254
CITR subsequently found not to have been due
Manner of withdrawal or reduction
255
Manner of withdrawal or reduction of CITR
Supplementary and general
Alternative finance arrangements
256
Meaning of “loan” and “interest”
257
Purchase and resale arrangements
258
Deposit arrangements
259
Profit share agency arrangements
260
Information to be provided by the investor
261
Disclosure
262
Nominees
263
Application for postponement of tax pending appeal
264
Identification of securities or shares on a disposal
Definitions
265
Meaning of “issue of securities or shares”
266
Meaning of “disposal”
267
Construction of references to being “held continuously”
268
Meaning of “associate”
269
Minor definitions etc
xiii
Part 8
Oil activities
270
Overview of Part
Basic definitions
271
“Associated companies”
272
“Oil extraction activities”
273
“Oil rights”
274
“Oil-related activities”
275
“Ring fence income”
276
“Ring fence profits”
277
“Ring fence trade”
278
Deemed separate trade
279
Oil-related activities treated as separate trade
Calculation of profits
Oil valuation
280
Disposal to be valued by reference to section 2(5A) of OTA 1975
281
Valuation where market value taken into account under section 2 of OTA
1975
282
Valuation where disposal not sale at arm’s length
283
Valuation where excess of nominated proceeds
284
Valuation where relevant appropriation but no disposal
285
Valuation where appropriation to refining etc
Loan relationships
286
Restriction on debits to be brought into account
287
Restriction on credits to be brought into account
Sale and lease-back
288
xiv
Regional development grants
289
Reduction of expenditure by reference to regional development grant
290
Adjustment as a result of regional development grant
Tariff receipts etc
291
Abandonment guarantees
292
Expenditure on and under abandonment guarantees
293
Relief for reimbursement expenditure under abandonment guarantees
294
Payment under abandonment guarantee not immediately applied
295
Amounts excluded from section 293(1)
Abandonment expenditure
296
Introduction to sections 297 and 298
297
Relief for expenditure incurred by a participator in meeting defaulter’s
abandonment expenditure
298
Reimbursement by defaulter in respect of certain abandonment expenditure
Deduction of PRT in calculating income for corporation tax purposes
299
300
Effect of repayment of PRT: general rule
301
Effect of repayment of PRT: special rule
Interest on repayment of PRT or APRT
302
Relief
303
Management expenses
304
Losses
305
Group relief
306
Capital allowances
Ring fence expenditure supplement
307
Application and interpretation
308
Qualifying companies
309
Accounting periods
310
The relevant percentage
311
Limit on number of accounting periods for which supplement may be
claimed