Finance (No. 2) Act 2017

PART 2 Consequential amendments

ICTA

2 (1) Section 826 of ICTA (interest on tax overpaid) is amended as follows.

(2) In subsection (1), after paragraph (fd) insert—

“(fe) a payment of museums and galleries exhibition tax credit falls to be made to a company; or”.

(3) In subsection (3C), for “or orchestra tax credit” substitute “, orchestra tax credit or museums and galleries exhibition tax credit”.

(4) In subsection (8A)—

(a) in paragraph (a), for “or (fd)” substitute “, (fd) or (fe)”, and

(b) in paragraph (b)(ii), after “orchestra tax credit” insert “or museums and galleries exhibition tax credit”.

(5) In subsection (8BA), after “orchestra tax credit” (in both places) insert “or museums and galleries exhibition tax credit”.

FA 1998

3 Schedule 18 to FA 1998 (company tax returns, assessments and related matters) is amended in accordance with paragraphs 4 to 6.

4 In paragraph 10 (other claims and elections to be included in return), in sub-paragraph (4), for “or 15D” substitute “, 15D or 15E”.

5 (1) Paragraph 52 (recovery of excessive repayments etc) is amended as follows.

(2) In sub-paragraph (2), after paragraph (bh) insert—

“(bi) museums and galleries exhibition tax credit under Part 15E of that Act,”.

(3) In sub-paragraph (5)—

(a) after paragraph (aj) insert—

“(ak) an amount of museums and galleries exhibition tax credit paid to a company for an accounting period,”, and

(b) in the words after paragraph (b), after “(aj)” insert “, (ak)”.

6 In Part 9D (certain claims for tax relief)—

(a) in the heading, for “or 15D” substitute “, 15D or 15E”, and

(b) in paragraph 83S (introduction), after sub-paragraph (f) insert—

“(g) museums and galleries exhibition tax relief.”

CAA 2001

7 In Schedule A1 to CAA 2001 (first-year tax credits), in paragraph 11(4), omit the “and” at the end of paragraph (f) and after paragraph (g) insert “, and

(h) Chapter 3 of Part 15E of that Act (museums and galleries exhibition tax credits).”

FA 2007

8 In Schedule 24 to FA 2007 (penalties for errors), in paragraph 28(fa) (meaning of “corporation tax credit”), omit the “or” at the end of paragraph (ivd) and after that paragraph insert—

“(ive) a museums and galleries exhibition tax credit under Chapter 3 of Part 15E of that Act, or”.

CTA 2009

9 CTA 2009 is amended in accordance with paragraphs 10 to 14.

10 In section 104BA (restriction on claiming other tax reliefs), after subsection (4) insert—

“(5) For provision prohibiting an R&D expenditure credit being given under this Chapter and relief being given under Chapter 3 of Part 15E (museums and galleries exhibition tax relief), see section 1218ZCG(2).”

11 In Part 8 (intangible fixed assets), in Chapter 10 (excluded assets), after section 808D insert—

“808E Assets representing expenditure incurred in course of separate exhibition trade

(1) This Part does not apply to an intangible fixed asset held by a museums and galleries exhibition production company so far as the asset represents expenditure on an exhibition that is treated under Part 15E as expenditure of a separate trade (see particularly sections 1218ZB and 1218ZBE).

(2) In this section—

• “exhibition” has the same meaning as in Part 15E (see section 1218ZAA);

• “museums and galleries exhibition production company” means a company which, for the purposes of that Part, is the primary production company or a secondary production company for an exhibition (see sections 1218ZAC and 1218ZAD).”

12 In section 1040ZA (restriction on claiming other tax reliefs), after subsection (4) insert—

“(5) For provision prohibiting relief being given under this Part and under Chapter 3 of Part 15E (museums and galleries exhibition tax relief), see section 1218ZCG(2).”

13 In section 1310 (orders and regulations), in subsection (4), after paragraph (eo) insert—

“(ep) section 1218ZCC (EEA expenditure condition),

(eq) section 1218ZCF (amount of additional deduction),

(er) section 1218ZF (regulations about activities in relation to exhibition),”.

14 In Schedule 4 (index of defined expressions), insert at the appropriate places—

“company tax return (in Part 15E)

section 1218ZFA”

“core expenditure (in Part 15E)

section 1218ZCD”

“costs, in relation to an exhibition (in Part 15E)

section 1218ZBC”

“EEA expenditure (in Part 15E)

section 1218ZCC(2)”

“EEA expenditure condition (in Part 15E)

section 1218ZCC”

“exhibition (in Part 15E)

section 1218ZAA”

“income, in relation to an exhibition (in Part 15E)

section 1218ZBB”

“museums and galleries exhibition tax relief (in Part 15E)

section 1218ZC(1)”

“primary production company (in Part 15E)

section 1218ZAC”

“qualifying expenditure (in Part 15E)

section 1218ZCG”

“secondary production company (in Part 15E)

section 1218ZAD”

“separate exhibition trade (in Part 15E)

section 1218ZB”

“touring exhibition (in Part 15E)

section 1218ZAB”.

FA 2009

15 In Schedule 54A to FA 2009 (which is prospectively inserted by F(No. 3)A 2010 and contains provision about the recovery of certain amounts of interest paid by HMRC), in paragraph 2—

(a) in sub-paragraph (2), omit the “or” at the end of paragraph (h) and after paragraph (i) insert “, or

(j) a payment of museums and galleries exhibition tax credit under Chapter 3 of Part 15E of CTA 2009 for an accounting period.”;

(b) in sub-paragraph (4), for “(i)” substitute “(j)”.

CTA 2010

16 In Part 8B of CTA 2010 (trading profits taxable at Northern Ireland rate), in section 357H(7) (introduction), after “Chapter 14A for provision about orchestra tax relief;” insert “Chapter 14B for provision about museums and galleries exhibition tax relief;”.

17 In Part 8B of CTA 2010, after section 357UQ insert—

“CHAPTER 14B Museums and galleries exhibition tax relief

Introductory

357UR Introduction and interpretation

(1) This Chapter makes provision about the operation of Part 15E of CTA 2009 (museums and galleries exhibition tax relief) in relation to expenditure incurred by a company in an accounting period in which it is a Northern Ireland company.

(2) In this Chapter—

(a) “Northern Ireland expenditure” means expenditure incurred in a trade to the extent that the expenditure forms part of the Northern Ireland profits or Northern Ireland losses of the trade;

(b) “the separate exhibition trade” has the same meaning as in Part 15E of CTA 2009 (see section 1218ZB(3) of that Act);

(c) “qualifying expenditure” has the same meaning as in Chapter 3 of that Part (see section 1218ZCG of that Act).

(3) References in Part 15E of CTA 2009 to “museums and galleries exhibition tax relief” include relief under this Chapter.

Museums and galleries exhibition tax relief

357US Northern Ireland additional deduction

(1) In this Chapter “a Northern Ireland additional deduction” means so much of a deduction under section 1218ZCE of CTA 2009 (claim for additional deduction) as is calculated by reference to qualifying expenditure that is Northern Ireland expenditure.

(2) A Northern Ireland additional deduction forms part of the Northern Ireland profits or Northern Ireland losses of the separate exhibition trade.

357UT Northern Ireland supplementary deduction

(1) This section applies where—

(a) a company is entitled under section 1218ZCE of CTA 2009 to an additional deduction in calculating the profit or loss of the separate exhibition trade in an accounting period,

(b) the company is a Northern Ireland company in the period,

(c) the additional deduction is wholly or partly a Northern Ireland additional deduction, and

(d) any of the following conditions is met—

(i) the company does not have a surrenderable loss in the accounting period;

(ii) the company has a surrenderable loss in the accounting period, but does not make a claim under section 1218ZCH of CTA 2009 (museums and galleries exhibition tax credit claimable if company has surrenderable loss) for the period;

(iii) the company has a surrenderable loss in the accounting period and makes a claim under that section for the period, but the amount of Northern Ireland losses surrendered on the claim is less than the Northern Ireland additional deduction.

(2) The company is entitled to make another deduction (“a Northern Ireland supplementary deduction”) in respect of qualifying expenditure.

(3) See section 357UU for provision about the amount of the Northern Ireland supplementary deduction.

(4) The Northern Ireland supplementary deduction—

(a) is made in calculating the profit or loss of the separate exhibition trade, and

(b) forms part of the Northern Ireland profits or Northern Ireland losses of the separate exhibition trade.

(5) In this section “surrenderable loss” has the meaning given by section 1218ZCI of CTA 2009.

357UU Northern Ireland supplementary deduction: amount

(1) This section contains provision for the purposes of section 357UT(2) about the amount of the Northern Ireland supplementary deduction.

(2) If the accounting period falls within only one financial year, the amount of the Northern Ireland supplementary deduction is—

where—

• A is the amount of the Northern Ireland additional deduction brought into account in the accounting period;

• B is the amount of Northern Ireland losses surrendered in any claim under section 1218ZCH of CTA 2009 for the accounting period;

• MR is the main rate for the financial year;

• NIR is the Northern Ireland rate for the financial year.

(3) If the accounting period falls within more than one financial year, the amount of the Northern Ireland supplementary deduction is determined by taking the following steps.

• Step 1

  Calculate, for each financial year, the amount that would be the Northern Ireland supplementary deduction for the accounting period if it fell within only that financial year (see subsection (2)).

• Step 2

  Multiply each amount calculated under step 1 by the proportion of the accounting period that falls within the financial year for which it is calculated.

• Step 3

  Add together each amount found under step 2.

357UV Museums and galleries exhibition tax credit: Northern Ireland supplementary deduction ignored

For the purpose of determining the available loss of a company under section 1218ZCI of CTA 2009 (amount of surrenderable loss) for any accounting period, any Northern Ireland supplementary deduction made by the company in the period (and any Northern Ireland supplementary deduction made in any previous accounting period) is to be ignored.

Losses of separate exhibition trade

357UW Restriction on use of losses before completion period

(1) Section 1218ZDA of CTA 2009 (restriction on use of losses before completion period) has effect subject as follows.

(2) The reference in subsection (1) of that section to a loss made in the separate exhibition trade in an accounting period preceding the completion period is, if the company is a Northern Ireland company in that period, a reference to—

(a) any Northern Ireland losses of the trade of the period, or

(b) any mainstream losses of the trade of the period;

and references to losses in subsections (2) and (3) of that section are to be read accordingly.

(3) Subsection (4) applies if a Northern Ireland company has, in an accounting period preceding the completion period—

(a) both Northern Ireland losses of the trade and mainstream profits of the trade, or

(b) both mainstream losses of the trade and Northern Ireland profits of the trade.

(4) The company may make a claim under section 37 (relief for trade losses against total profits) for relief for the losses mentioned in subsection (3)(a) or (b).

(5) But relief on such a claim is available only—

(a) in the case of a claim for relief for Northern Ireland losses, against mainstream profits of the trade of the same period;

(b) in the case of a claim for relief for mainstream losses, against Northern Ireland profits of the trade of the same period.

(6) In this section “the completion period” has the same meaning as in section 1218ZDA of CTA 2009 (see section 1218ZD(2) of that Act).

357UX Use of losses in the completion period

(1) Section 1218ZDB of CTA 2009 (use of losses in the completion period) has effect subject as follows.

(2) The reference in subsection (1) of that section to a loss made in the separate exhibition trade is, in relation to a loss made in a period in which the company is a Northern Ireland company, a reference to—

(a) any Northern Ireland losses of the trade of the period, or

(b) any mainstream losses of the trade of the period;

and references to losses in subsections (2) and (4) of that section are to be read accordingly.

(3) The references in subsection (3) of that section to a loss made in the separate exhibition trade in the completion period are, where the company is a Northern Ireland company in the period, references to—

(a) any Northern Ireland losses of the trade of the period, or

(b) any mainstream losses of the trade of the period;

and references to losses in subsection (4) of that section are to be read accordingly.

(4) Subsection (4) of that section has effect, in relation to Northern Ireland losses, as if the reference to an additional deduction under Chapter 3 of Part 15E of CTA 2009 included a reference to a Northern Ireland supplementary deduction under this Chapter.

357UY Terminal losses

(1) Section 1218ZDC of CTA 2009 (terminal losses) has effect subject as follows.

(2) Where—

(a) a company makes an election under subsection (3) of that section (election to treat terminal loss as loss brought forward of different trade) in relation to all or part of a terminal loss, and

(b) the terminal loss is a Northern Ireland loss,

that subsection has effect as if the reference in it to a loss brought forward were to a Northern Ireland loss brought forward.

(3) Where—

(a) a company makes a claim under subsection (6) of that section (claim to treat terminal loss as loss brought forward by different company) in relation to part or all of a terminal loss, and

(b) the terminal loss is a Northern Ireland loss,

that subsection has effect as if the reference in it to a loss brought forward were to a Northern Ireland loss brought forward.”

18 (1) Schedule 4 to CTA 2010 (index of defined expressions) is amended as follows.

(2) In the entry for “Northern Ireland expenditure”—

(a) for “14A” substitute “14B”, and

(b) for “and 357UJ(2)” substitute “, 357UJ(2) and 357UR(2)”.

(3) Insert at the appropriate places—

“qualifying expenditure (in Chapter 14B of Part 8B)

section 357UR(2)”

“the separate exhibition trade (in Chapter 14B of Part 8B)

section 357UR(2)”

FA 2016

19 In Schedule 24 to FA 2016 (tax advantages constituting the grant of state aid), in Part 1, in the table headed “Creative tax reliefs”, after the entry for “Orchestra tax relief” insert—

““Museums and galleries exhibition tax relief

Part 15E of CTA 2009”