Finance Act 2021

PART 2 U.K. Amendments of Chapter 3A of Part 8 of CTA 2010

4 U.K. Chapter 3A of Part 8 of CTA 2010 (rates at which corporation tax is charged on ring fence profits) is amended as follows.

5 U.K. In section 279A (corporation tax rates on ring fence profits), in subsection (3), after paragraph (a) but before the “and” at the end of that paragraph insert—

“(ab) it is not a close investment-holding company in the period,”.

6 U.K. In section 279B (company with only ring fence profits)—

(a) in subsection (1), after paragraph (a) insert—

“(ab) it is not a close investment-holding company in the period,”,

(b) in subsection (2), in the definition of “R”, for “marginal” substitute “ ring fence marginal ”, and

(c) in subsection (3), for “marginal” substitute “ ring fence marginal ”.

7 (1) Section 279C (company with ring fence profits and other profits) is amended as follows. U.K.

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

“(ab) it is not a close investment-holding company in the period,”.

(3) For subsection (2) substitute—

“(2) The corporation tax charged on the company's taxable total profits of the accounting period is reduced by the total of—

(a) the sum equal to the ring fence marginal relief fraction of the ring fence amount, and

(b) the sum equal to the standard marginal relief fraction of the remaining amount.”

8 U.K. After section 279D insert—

“279DA The remaining amount

(1) In section 279C “the remaining amount” means the amount given by the formula—

(2) In this section—

• UZ is the amount given by multiplying the upper limit by—

  

• AZ is the total amount of any profits other than ring fence profits that form part of the augmented profits of the accounting period,

• NZ is the total amount of any profits other than ring fence profits that form part of the taxable total profits of the accounting period, and

• A is the amount of the augmented profits of the accounting period.”

9 (1) Section 279E (the lower limit and the upper limit) is amended as follows. U.K.

(2) In subsection (2)—

(a) in the opening words, for “If no company is a related 51% group company of A” substitute “ If A has no associated company ”,

(b) in paragraph (a), for “£300,000” substitute “ £50,000 ”, and

(c) in paragraph (b), for “£1,500,000” substitute “ £250,000 ”.

(3) In subsection (3)—

(a) in the opening words, for “If one or more companies are related 51% group companies of A” substitute “ If A has one or more associated companies ”,

(b) in paragraph (a), for “£300,000” substitute “ £50,000 ”, and

(c) in paragraph (b), for “£1,500,000” substitute “ £250,000 ”.

10 U.K. After section 279E insert—

“Supplementary U.K.

279EA Interpretation etc

(1) The rules in Part 3A (see sections 18E to 18J) which apply for determining whether a company is another company's associated company in an accounting period for the purposes of section 18D apply for the purposes of section 279E.

(2) Section 18K (power to obtain information) applies for the purposes of this Part as it applies for the purposes of Part 3A.

(3) For the purposes of this Chapter—

• “augmented profits” has the same meaning as in Part 3A (see sections 18L and 18M), and

• “close investment-holding company” has the same meaning as in that Part (see section 18N).”

11 U.K. Omit sections 279F to 279H (meaning of “related 51% group company” etc).