Chapter 7: Miscellaneous provisions and interpretation of Part
Overview
731.This Chapter contains definitions and two minor rules.
Section 183: Payments for group relief
732.This section takes outside the tax system any payments for group relief. It is based on section 402 of ICTA.
733.Originally (from 1953 to 1967) a form of group relief was available, based on “subvention” payments from one company to another. The payment was allowed as a deduction, reducing the profits of the paying company; and it was a taxable receipt of the company receiving the payment. Such payments are no longer required by United Kingdom tax law. But they may be made by agreement between group members. This section ensures that they are neither allowed as a deduction nor taxed.
Section 184: References to “allowance” in CAA 2001
734.This section clarifies the position if capital allowances are surrendered as group relief. It is based on section 411 of ICTA.
735.Capital allowances surrendered as group relief still count as having been made to the surrendering company. This means that a balancing charge on the surrendering company takes into account those surrendered allowances.
Section 185: “Trading company” and “holding company”
736.This section provides definitions. It is based on section 413(3) of ICTA.
Section 186: When activities of a company are double taxation exempt
737.This section explains what is meant by activities that are double taxation exempt. It is based on section 403D of, and paragraph 5F of Schedule 18 to, ICTA.
738.The definition is used in sections 107(4), 108(3), 140(8), and 182(b).
739.Subsection (1) makes the link between the activities that are described in the Part as exempt and the profits from those activities which are the subject of exemption under a DTA.
740.Subsection (2) makes clear that activities are to be treated as exempt whether or not any necessary claim for exemption is actually made.
741.Subsection (3) defines “double taxation arrangements” by reference tosection 2 of TIOPA. They are “… arrangements … made in relation to any territory outside the United Kingdom with a view to affording relief from double taxation in relation to …” the taxes within subsection (3) of that section.
Section 187: Meaning of “non-UK tax”
742.This section defines “non-UK tax” for this Part of the Act. It is based on sections 403D and 403E of, and paragraph 17 of Schedule 18A to, ICTA. The expression is used in sections 106 to 109, 115 to 121 and 949.
743.Subsection (1) is the basic rule that the non-UK tax must correspond to United Kingdom income tax or corporation tax.
744.Subsection (2) makes clear that the non-UK tax need not be a national tax: it may be a tax imposed by a province or state of a foreign country.
Section 188: Other definitions
745.This section sets out definitions of expressions used in the Part. It is based on sections 6(4) and 413 of ICTA.
746.Subsection (2) defines “trade” so that it includes an office but does not refer to a company having a vocation or employment.See Change 4 in Annex 1.
