The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 No. 2310

SCHEDULE EXPENSES OF COMPANIES WITH INVESTMENT BUSINESS AND INSURANCE COMPANIES

Finance Act 2001

Remediation of contaminated land: entitlement to land remediation tax credit

58.—(1) In Schedule 22 to the Finance Act 2001(1) paragraph 14 is amended as follows.

(2) In sub-paragraph (6) (loss treated under section 432AB(3) of the Taxes Act 1988 as expenses of management under section 76) for “as an amount of expenses of management under section 76 of that Act” substitute “for the purposes of section 76 of that Act as expenses payable which fall to be brought into account at Step 3 in subsection (7) of that section”.

(3) In sub-paragraph (7) (no amount carried forward to succeeding accounting period under section 75(3) of the Taxes Act 1988)—

(a) for “section 75(3)” substitute “section 76(12) or (13)”; and

(b) for “expenses of management” substitute “unrelieved expenses”.

(4) In sub-paragraph (8) (Schedule A loss where amount to be carried forward under section 75(3) of the Taxes Act 1988)—

(a) for “section 75(3)” substitute “section 76(12) or (13)”; and

(b) in paragraph (b) for “the amount” substitute “the total amount”.

(5) For sub-paragraph (9) (disregard of amounts brought forward from either periods under section 75(3) of the Taxes Act 1988 etc) substitute—

“(9) In determining for the purposes of sub-paragraph (7) and (8) above whether there is an amount which falls to be carried forward under subsection (12) or (13) of section 76 of Taxes Act 1988, there shall be disregarded any amounts brought forward from an earlier accounting period and treated for the purposes of that section as expenses payable which fall to be brought into account for that period in question—

(a) in accordance with Step 6 in subsection (7) of that section, by virtue of a previous application of subsection (12) or (13) of that section, or

(b) in accordance with Step 3 in subsection (7) of that section, by virtue of paragraph 4(4) of Schedule 11 to the Finance Act 1996 (loan relationships deficit carried forward and so brought into account).”.

Land remediation tax credit: restriction of losses carried forward

59.—(1) In Schedule 22 to the Finance Act 2001 paragraph 17 is amended as follows.

(2) In sub-paragraph (3) (case where sub-paragraph (4) applies)—

(a) in paragraph (a) (loss treated under section 432AB(3) of the Taxes Act 1988 as expenses of management under section 76) for—

“as an amount of expenses of management under section 76 of that Act”

substitute—

“for the purposes of section 76 of that Act as expenses payable which fall to be brought into account at Step 3 in subsection (7) of that section”; and

(b) in paragraph (b) (amount falls to be carried forward to succeeding accounting period under section 75(3) of the Taxes Act 1988)—

(i) for “section 75(3)” substitute “section 76(12) or (13)”; and

(ii) for “expenses of management” substitute “unrelieved expenses”.

(3) In sub-paragraph (4) (amount carried forward under section 75(3) of Taxes Act 1988 to be reduced by loss surrendered)—

(a) for “the amount which” substitute “the total amount which”; and

(b) for “section 75(3)” substitute “section 76(12) or (13)”.

Land remediation tax credit: entitlement to relief: “I minus E” basis

60.—(1) In Schedule 22 to the Finance Act 2001 paragraph 22 is amended as follows.

(2) In sub-paragraph (3) (amount of company’s qualifying expenditure) for—

“reduced by the amount (if any) which by virtue of section 76(1)(d) of the Taxes Act 1988 is not to be treated as expenses of management”

substitute—

“reduced by the amount (if any) which by virtue of paragraph (a) of Step 1 in section 76(7) of the Taxes Act 1988 is not to be brought into account at that Step as expenses payable for that period”.

Land remediation tax credit: giving effect to relief: enhanced expenses of management

61.—(1) In Schedule 22 to the Finance Act 2001 paragraph 23 is amended as follows.

(2) In sub-paragraph (1) (which contains a description of section 76 of the Taxes Act 1988) for “deduction of expenses of management etc” substitute “deduction in respect of expenses payable”.

(3) In sub-paragraph (2) (claim to treat 150% of qualifying expenditure as part of company’s expenses of management) for “as part of its expenses of management for that period” substitute—

“as expenses payable which fall to be brought into account for that period at Step 1 in section 76(7) of the Taxes Act 1988”.

(4) The heading to the paragraph accordingly becomes “Giving effect to relief: enhanced expenses payable”.

Land remediation tax credit: entitlement to life assurance company tax credit

62.—(1) In Schedule 22 to the Finance Act 2001 paragraph 24 is amended as follows.

(2) In sub-paragraph (2) (qualifying loss) in paragraph (b) (amount falls to be carried forward to succeeding accounting period under section 75(3) of the Taxes Act 1988)—

(a) for “section 75(3)” substitute “section 76(12) or (13)”; and

(b) for “expenses of management” substitute “unrelieved expenses”.

(3) For sub-paragraph (3) (disregard of amounts brought forward from earlier periods under section 75(3) of the Taxes Act 1988 etc) substitute—

“(3) In determining for the purposes of sub-paragraph (2)(b) whether there is an amount which falls to be carried forward under subsection (12) or (13) of section 76 of the Taxes Act 1988, there shall be disregarded any amounts brought forward from an earlier accounting period and treated for the purposes of that section as expenses payable which fall to be brought into account for the period in question—

(a) in accordance with Step 7 in subsection (7) of that section, by virtue of a previous application of subsection (12) or (13) of that section, or

(b) in accordance with Step 3 in subsection (7) of that section, by virtue of paragraph 4(4) of Schedule 11 to the Finance Act 1996 (loan relationships deficit carried forward and so brought into account).”.

Land remediation tax credit: restriction on carrying forward expenses of management as follows

63.—(1) In Schedule 22 to the Finance Act 2001 paragraph 27 is amended as follows.

(2) For sub-paragraph (1) (amount to be carried forward under section 75(3) of Taxes Act 1988 to be reduced by expenses of management surrendered) substitute—

“(1) For the purposes of section 76 of the Taxes Act 1988, the total amount which may—

(a) be carried forward under subsection (12) or (13) of that section from an accounting period in which the company claims a life assurance company tax credit, and

(b) be brought into account for the next accounting period in accordance with Step 7 in subsection (7) of that section,

is treated as reduced by the amount of the expenses payable surrendered.”.

(3) In sub-paragraph (2) (amount of expenses of management surrendered) for “expenses of management” substitute “expenses payable”.

(4) The heading to the paragraph accordingly becomes “Restriction on carrying forward expenses payable”.

(1)

2001 c. 9.