The Scottish Water (Transfer of Functions, etc.) (Tax Provisions) Order 2002

Corporation tax: general

4.—(1) For all purposes of the Corporation Tax Acts in relation to accounting periods beginning on or after 1st April 2002—

(a) Scottish Water shall be treated as if it were the same person as each of the new water and sewerage authorities, and

(b) the new water and sewerage authorities shall be treated as if together they were the same person as Scottish Water.

(2) For the purposes of section 393 of the Taxes Act(1) (losses other than terminal losses) the new water and sewerage authorities shall be treated as if, before 1st April 2002, they had together carried on a single trade.

(3) Section 400 of the Taxes Act(2) (write-off of government investment) shall not apply with regard to any debt transferred to Scottish Water by virtue of section 22 of the Water Industry (Scotland) Act 2002.

(4) For the purposes of section 400 of the Taxes Act the new water and sewerage authorities shall be treated as if, before 1st April 2002, they had together carried on a single trade.

(5) For the purposes of corporation tax on chargeable gains—

(a) Scottish Water shall be treated as having acquired all assets transferred from the new water and sewerage authorities by virtue of section 22 of the Water Industry (Scotland) Act 2002 at the time when they were acquired by the new water and sewerage authorities, and

(b) on any disposal of any of those assets by Scottish Water, any expenditure incurred by a new water and sewerage authority which would, if the disposal had been made by that authority, have been allowable by virtue of section 38 of the Taxation of Chargeable Gains Act 1992 in computing the chargeable gain or allowable loss on the disposal of the asset shall be treated as though it had been incurred by Scottish Water.

(1)

Section 393 was amended by section 99 of the Finance Act 1990 (c. 29) and section 73(2) of, and paragraph 8 of Schedule 15 and Part V of Schedule 19 to, the Finance Act 1992 (c. 31).

(2)

Section 400 was amended by paragraph 12 of Schedule 15 to the Finance Act 1991, paragraph 14(1) and (20) of Schedule 10 to the Taxation of Chargeable Gains Act 1992 (c. 12), paragraph 8(5) of Schedule 14 and Part III(11) of Schedule 23 to the Finance Act 1993 (c. 34), paragraph 19 of Schedule 14 to the Finance Act 1996 (c. 8), paragraph 36 of Schedule 5 and paragraph 1 of Schedule 7 to the Finance Act 1998 (c. 36), paragraph 87(1) and (2) of Part I of Schedule 2 to S.I. 1999/1820, and paragraph 35 of Schedule 2 to the Capital Allowances Act 2001 (c. 2).