3206.This section introduces Chapter 1 which contains definitions applying for the purposes of the Corporation Tax Acts. Where it is not new, it is based on section 832 of ICTA. The corresponding provision for income tax is in section 988 of ITA.
3207.A number of terms that are defined by ITA for the purposes of the Income Tax Acts are used without definitionin this Act. As that use is in an income tax context, the ITA definition applies in this Act.
3208.Subsections (3) to (5)indicate the extent to which the definitions apply.
3209.Subsection (5) makes clear that the application of a definition is also subject to any contrary indication.
3210.This section sets out the definitions in alphabetical order. It is based on a number of provisions in ICTA, in particular sections 832 and 834, and on section 1319 of CTA 2009. The corresponding provision for income tax is in section 989 of ITA.
3211.The definition of “Act” uses the term “Northern Ireland legislation”, which is defined in section 24(5) of the Interpretation Act 1978, rather than a list of categories of relevant legislation as in the source legislation. See Change 6 in Annex 1.
3212.The definition of “capital allowance” does not include, as specified by section 832(1) of ICTA, allowances under enactments which under ICTA are treated as contained in CAA. The only such enactment was section 532 of ICTA, which was repealed by CTA 2009.
3213.The definition of “period of account” omits the reference in the source legislation to “profession, vocation”. See Change 4 in Annex 1.
3214.The definition of “personal representatives” is new. It follows the approach adopted in ITTOIA and ITA. See Change 59in Annex 1.
3215.The definition of “tax” does not rewrite the words “and in any enactment passed after 12th March 1970 which by any express provision is to be construed as one with the Tax Acts, the Corporation Tax Acts or the Income Tax Acts” in section 832(3) of ICTA as the definition already applies in a case which is to be construed as one with the Corporation Tax Acts. The effect of the opening words of section 832(3) of ICTA (“except so far as the context otherwise requires”) is included in section 1118(4).
3216.The definition of “trade” has been streamlined in line with the approach in ITA.
3217.A number of definitions in section 832(1) of ICTA have not been rewritten. The definitions of “the Board”, “collector” and “inspector” were superseded by the interpretative rules in CRCA (see sections 5 to 7 and 50 of that Act). The terms “farm land” and “market garden land” no longer appear in corporation tax provisions but the substance of these definitions is included in the definitions in section 1125 (“farming” and related expressions). The term “qualifying policy” is no longer relevant to corporation tax provisions.
3218.This section defines “bank”. It is based on section 840A of ICTA. The corresponding provision for income tax is in section 991 of ITA.
3219.The definition operates only where specifically applied.
3220.The regulatory power mentioned in subsection (2)(e) differs from that in ITA, in that subsection (5) preserves the possibility in the source legislation that an organisation is designated for the purposes of only some provisions that deploy this definitionrather than all such provisions. Schedule 1 to this Act makes a corresponding consequential amendment to section 991 of ITA which brings the income tax and corporation tax codes back in line.
3221.This section defines “company”. It is based on section 832(1) and (2) of ICTA. The corresponding provision for income tax is in section 992 of ITA.
3222.Subsection (2) indicates that an “authorised unit trust” is treated as a company for specified purposes of the Corporation Tax Acts.
3223.The section does not rewrite the tail words of section 832(2) of ICTA as section 1118(4) fulfils the function, so far as now necessary (given the redundancy or repeal of some of the provisions mentioned in section 832(2) of ICTA), of ceding priority to a different definition.
3224.The reference to “sections 774 to 777” in the provisions listed in section 832(2) of ICTA implies the inclusion of sections 774A to 774G of ICTA. Those new sections were inserted by FA2006, i.e. after that list was drafted for ICTA in 1988. Those sections (rewritten in Chapter 2 of Part 16 of this Act) do not provide a bespoke definition of “company” nor did the drafter making the FA 2006 insertion provide that the exclusions in section 832(2) of ICTA should include those sections. Having regard to all that, and to give sensible effect in particular to the former section 774G(5) of ICTA (see section 774), the general definition in this section applies in those sections (so far as the use of the term in Chapter 2 of Part 16 of this Act needs a definition).
3225.This sectionsets out when various persons are regarded as “connected”. It is based on section 839 of ICTA. The corresponding provision for income tax is in section 993 of ITA.
3226.The definition operates only where specifically applied. Section 1176 applies the definition for the purposes of this Act unless otherwise indicated.
3227.This sectioncontains interpretative material for section 1122. It is based on section 839 of ICTA. The corresponding provision for income tax is in section 994 of ITA.
3228.This section defines what “control” of a company or partnership means. It is based on section 840 of ICTA. The corresponding provision for income tax is in section 995 of ITA.
3229.The drafting largely follows the approach adopted in section 574 of CAA.
3230.The definition operates only where specifically applied. Section 1176 applies the definition for the purposes of this Act unless otherwise indicated.
3231.This section defines “farming” and “market gardening” and modifies the meaning of “forestry” and “woodlands”. It is based on section 832 of ICTA and section 154 of FA 1995. The corresponding provision for income tax is in section 996 of ITA.
3232.Subsection (3) provides that the cultivation of short rotation coppice is to be regarded as husbandry. To be then regarded as farming, within the meaning given by subsection (1), the cultivation of short rotation coppice must involve the occupation of land. As it is impossible to cultivate short rotation coppice without occupying land, such cultivation is also regarded as farming.
3233.As with section 996 of ITA, there is no territorial restriction in the definitions in this section. There is therefore no needin section 48, which rewrites section 397 of ICTA (restriction of loss relief in farming and market gardening cases), to apply the provision to farming outside the United Kingdom as was the case in section 397(5) of ICTA. Similarly, the cultivation of short rotation coppice on land outside the United Kingdomis regarded as husbandry and therefore as farming.
3234.If a territorial restriction is required, it is applied to a particular section (following the pattern in ITA). So subsection (7) restricts the definitions, in their application to paragraph 26 of Schedule 15 to FA 2000 (corporate venturing scheme), to farming or market gardening in the United Kingdom.
3235.This section defines “franked investment income” and provides for the construction of references to an amount of franked investment income. It is based on sections 13(8AB) and 832(1) and (4A) of ICTA.
3236.This section defines a number of terms referring to accounting practice. It is based on the definition of “for accounting purposes” in section 832(1) of ICTA and on section 50 of FA 2004. The corresponding provision for income tax is in section 997 of ITA.
3237.This section sets out how to calculate the gross amount of an amount from which income tax has been deducted. To the extent it is not new, it is based on section 25(12) of FA 1990. The corresponding provision for income tax is in section 998 of ITA.
3238.This section defines a “hire-purchase agreement”. It is based on section 784(6) of ICTA and section 57(3), (4) and (6) of CTA 2009.
3239.This section defines a “local authority” in relation to the constituent parts of the United Kingdom. It is based on section 842A of ICTA. The corresponding provision for income tax is in section 999 of ITA.
3240.The definition, in its application to Northern Ireland, is restricted to bodies of a local rather than central government character. See Change 60 in Annex 1. An amendment in Schedule 1 makes the equivalent restriction in section 999 of ITA.
3241.This section defines a “local authority association”. It is based on section 519(3) of ICTA. The corresponding provision for income tax is in section 1000 of ITA.
3242.This section defines an “offshore installation”. It is based on section 837C(1) to (4) of ICTA. The corresponding provision for income tax is in section 1001 of ITA.
3243.This section provides regulatory power for the purposes of section 1132. It is based on section 837C(5) and (6) of ICTA. The corresponding provision for income tax is in section 1002 of ITA.
3244.This section defines the expression “oil and gas exploration and approval”. It is based on section 837B of ICTA. The corresponding provision for income tax is in section 1003 of ITA.
3245.This section defines a “property investment LLP”. It is based on section 842B of ICTA. The corresponding provision for income tax is in section 1004 of ITA.
3246.This section defines a “qualifying distribution”. It is based on sections 14(2) and 832(1) of ICTA.
3247.This section defines a “recognised stock exchange”. It is based on section 841 of ICTA. The corresponding provision for income tax is in section 1005 of ITA.
3248.This section operates by cross-reference to the definition in section 1005 of ITA. This guards against any risk of orders being made (under powers in that section) which might inadvertently result in the two definitions getting out of step.
3249.This section defines the expression “research and development”. It is based on section 837A of ICTA. The corresponding provision for income tax is in section 1006 of ITA.
3250.This section defines “tax advantage”. It is based on section 840ZA of ICTA. The section is modelled on the definition of “income tax advantage” in section 683 of ITA.
3251.This section defines an “unauthorised unit trust”. It is based on section 832(1) of ICTA. The corresponding provision for income tax is in section 989 of ITA.
3252.Subsection (2) applies the effect of regulations made under section 1007 of ITA that exclude certain unit trust schemes from those that would otherwise meet the definition in subsection (1).