Corporation Tax Act 2009

Part 1 Income and Corporation Taxes Act 1988

1 The Income and Corporation Taxes Act 1988 (c. 1) is amended as follows.

2 (1) Amend section 6 (the charge to corporation tax and exclusion of income tax and capital gains tax) as follows.

(2) Omit subsections (1) to (3).

(3) In subsection (4) omit the words from “, sections” to “248”.

(4) Omit subsection (4A).

3 Omit section 8 (general scheme of corporation tax).

4 (1) Amend section 9 (computation of income: application of income tax principles) as follows.

(2) Omit subsections (1) to (4).

(3) In subsection (5) omit “, by virtue of this section or otherwise,”.

(4) Omit subsection (6).

5 In section 11 (companies not resident in United Kingdom) omit subsections (1) to (2A).

6 Omit section 11AA (determination of profits attributable to permanent establishment).

7 Omit section 12(1) to (7ZA) and (9) (basis of, and periods for, assessment).

8 Omit section 15 (Schedule A).

9 Omit section 18 (Schedule D).

10 Omit section 21A (computation of amount chargeable under Schedule A).

11 Omit section 21B (application of other rules applicable to Case I of Schedule D).

12 Omit section 21C (the Schedule A charge and mutual business).

13 (1) Amend section 24 (construction of Part 2) as follows.

(2) In subsection (1)—

(a) after “lessee or a lessor;” insert “and”, and

(b) omit the definition of “premium”.

(3) Omit subsections (2) to (4).

(4) In subsection (5) omit the definitions of “intermediate landlord”, “premium” and “reversion”.

(5) Omit subsection (6)(a).

14 Omit section 30 (expenditure on making sea walls).

15 Omit sections 31ZA to 31ZC (deductions for expenditure on energy-saving items).

16 Omit sections 34 to 39 (premiums, leases at undervalue etc).

17 Omit section 40 (tax treatment of receipts and outgoings on sale of land).

18 (1) Amend section 42 (appeals against determinations under sections 34 to 36 of ICTA etc) as follows.

(2) Omit subsection (1)(a) and the “or” immediately after it.

(3) In the title omit “sections 34 to 36 or”.

19 Omit section 46 (savings certificates and tax reserve certificates).

20 Omit section 53 (farming and other commercial occupation of land (except woodlands)).

21 Omit section 55 (mines, quarries and other concerns).

22 (1) Amend section 56 (transactions in deposits with and without certificates or in debts) as follows.

(2) In subsection (2) for the words from “annual” to the end substitute “an amount to which the charge to corporation tax on income applies”.

(3) In subsection (4B) for “Chapter II of Part IV of the Finance Act 1996” and “that Chapter” substitute “Part 5 of CTA 2009” and “that Part” respectively.

23 Omit section 70 (basis of assessment etc).

24 Omit section 70A (Case V income from land outside UK).

25 Omit section 72 (apportionments etc for purposes of Cases I, II and VI).

26 Omit section 74 (general rules as to deductions not allowable).

27 Omit section 75 (expenses of management: companies with investment business).

28 Omit section 75A (accounting period to which expenses of management are referable).

29 Omit section 75B (amounts reversing expenses of management deducted: charge to tax).

30 (1) Amend section 76 (expenses of insurance companies) as follows.

(2) In subsection (1) for “section 75 is not to apply” substitute “sections 1219 to 1223 of CTA 2009 (expenses of management of a company’s investment business) do not apply”.

(3) In subsection (2) for the words from “paragraph 4(2)” to the end substitute “section 388 of CTA 2009 (basic rule: deficit set off against income and gains of deficit period)”.

(4) In subsection (4) for “Case I of Schedule D” substitute “section 35 of CTA 2009 (charge on trade profits)”.

(5) At Step 2 in subsection (7)—

(a) in paragraph (a) for “in computing income for the purposes of Schedule A” substitute “in computing, for corporation tax purposes, the profits of a UK property business”, and

(b) in paragraph (c) for “section 121(3)” substitute “section 272 of CTA 2009”.

(6) At Step 3 in subsection (7)—

(a) omit the entries relating to—

(i) paragraph 4(4)(b) of Schedule 11 to the Finance Act 1996,

(ii) paragraph 23 of Schedule 22 to the Finance Act 2001,

(iii) paragraph 13(2) of Schedule 12 to the Finance Act 2002, and

(iv) paragraph 36(3) of Schedule 29 to that Act, and

(b) at the end insert—

• “section 391(3)(b) of CTA 2009 (carried forward non-trading deficit on loan relationships);

• section 1080(2) of CTA 2009 (30% additional deduction for qualifying R&D expenditure of company carrying on life assurance business);

• section 1161 of CTA 2009 (150% relief for remediation expenditure on contaminated land owned by company carrying on life assurance business).”

31 After section 76 insert—

“Payments for restrictive undertakings

76ZA Payments for restrictive undertakings

(1) This section applies if a payment—

(a) is treated as earnings of an employee by virtue of section 225 of ITEPA 2003 (payments for restrictive undertakings), and

(b) is made, or treated as made for the purposes of section 226 of that Act (valuable consideration given for restrictive undertakings), by a company in relation to which section 76 applies.

(2) The payment is treated as expenses payable which fall to be brought into account at Step 1 in section 76(7), so far as it otherwise would not be.”

32 After section 76ZA insert—

“Seconded employees

76ZB Employees seconded to charities and educational establishments

(1) This section applies if a company to which section 76 applies makes the services of a person employed for the purposes of the company’s life assurance business available to—

(a) a charity, or

(b) an educational establishment,

on a basis that is stated and intended to be temporary.

(2) Expenses of the employer that are attributable to the employee’s employment during the period of the secondment are treated as expenses payable which fall to be brought into account at Step 1 in section 76(7).

(3) In this section—

• “educational establishment” has the same meaning as in section 70 of CTA 2009, and

• “the period of the secondment” means the period for which the employee’s services are made available to the charity or educational establishment.”

33 After section 76ZB insert—

“Counselling and retraining expenses

76ZC Counselling and other outplacement services

(1) This section applies if—

(a) a company carrying on life assurance business (“the employer”) incurs counselling expenses,

(b) the expenses are incurred in relation to a person (“the employee”) who holds or has held an office or employment under the employer, and

(c) the relevant conditions are met.

(2) The expenses are brought into account under section 76 as expenses payable (so far as they otherwise would not be).

(3) In this section “counselling expenses” means expenses incurred—

(a) in the provision of services to the employee in connection with the cessation of the office or employment,

(b) in the payment or reimbursement of fees for such provision, or

(c) in the payment or reimbursement of travelling expenses in connection with such provision.

(4) In this section “the relevant conditions” means—

(a) conditions A to D for the purposes of section 310 of ITEPA 2003 (employment income exemptions: counselling and other outplacement services), and

(b) in the case of travel expenses, condition E for those purposes.”

34 After section 76ZC insert—

“76ZD Retraining courses

(1) This section applies if—

(a) a company carrying on life assurance business (“the employer”) incurs training course expenses,

(b) they are incurred in relation to a person (“the employee”) who holds or has held an office or employment under the employer, and

(c) the relevant conditions are met.

(2) The expenses are brought into account under section 76 as expenses payable (so far as they otherwise would not be).

(3) In this section—

• “retraining course expenses” means expenses incurred in the payment or reimbursement of retraining course expenses within the meaning given by section 311(2) of ITEPA 2003, and

• “the relevant conditions” means—

  (a)

  the conditions in subsections (3) and (4) of section 311 of ITEPA 2003 (employment income exemptions: retraining courses), and

  (b)

  in the case of travel expenses, the conditions in subsection (5) of that section.”

35 After section 76ZD insert—

“76ZE Retraining courses: recovery of tax

(1) This section applies if—

(a) an employer’s liability to corporation tax for an accounting period is determined on the assumption that it is entitled by virtue of section 76ZD to bring an amount into account in determining the amount of a deduction to be made under section 76, and

(b) without section 76ZD the employer would not have been so entitled.

(2) If, subsequently—

(a) the condition in section 311(4)(a) of ITEPA 2003 is not met because of the employee’s failure to begin the course within the period of one year after ceasing to be employed, or

(b) the condition in section 311(4)(b) of ITEPA 2003 is not met because of the employee’s continued employment or re-employment,

an assessment of an amount or further amount of corporation tax due as a result of the condition not being met may be made under paragraph 41 of Schedule 18 to FA 1998.

(3) Such an assessment must be made before the end of the period of 6 years immediately following the end of the accounting period in which the failure to meet the condition occurred.

(4) If subsection (2) applies, the employer must give an officer of Revenue and Customs a notice containing particulars of—

(a) the employee’s failure to begin the course,

(b) the employee’s continued employment, or

(c) the employee’s re-employment,

within 60 days of coming to know of it.

(5) If an officer of Revenue and Customs has reason to believe that the employer has failed to give such a notice, the officer may by notice require the employer to provide such information as the officer may reasonably require for the purposes of this section about—

(a) the failure to begin the course,

(b) the continued employment, or

(c) the re-employment.

(6) A notice under subsection (5) may specify a time (not less than 60 days) within which the required information must be provided.”

36 After section 76ZE insert—

“Redundancy payments etc

76ZF Redundancy payments and approved contractual payments

(1) Sections 76ZG to 76ZI apply if—

(a) a company to which section 76 applies (“the employer”) makes a redundancy payment or an approved contractual payment to another person (“the employee”), and

(b) the payment is in respect of the employee’s employment wholly in the employer’s life assurance business or partly in the employer’s life assurance business and partly in one or more other capacities.

(2) For the purposes of this section and sections 76ZG to 76ZH “redundancy payment” means a redundancy payment payable under—

(a) Part 11 of the Employment Rights Act 1996, or

(b) Part 12 of the Employment Rights (Northern Ireland) Order 1996.

(3) For the purposes of this section and those sections—

• “contractual payment” means a payment which, under an agreement, an employer is liable to make to an employee on the termination of the employee’s contract of employment, and

• a contractual payment is “approved” if, in respect of that agreement, an order is in force under—

  (a)

  section 157 of the Employment Rights Act 1996, or

  (b)

  Article 192 of the Employment Rights (Northern Ireland) Order 1996.”

37 After section 76ZF insert—

“76ZG Payments in respect of employment wholly in employer’s business

(1) This section applies if the payment is in respect of the employee’s employment wholly in the employer’s life assurance business.

(2) The payment is treated as expenses payable which fall to be brought into account at Step 1 in section 76(7), so far as it otherwise would not be.

(3) The amount brought into account by virtue of this section for an approved contractual payment must not exceed the amount which would have been due to the employee if a redundancy payment had been payable.

(4) If the payment is referable to an accounting period beginning after the business has permanently ceased to be carried on, it is treated as referable to the last accounting period in which the business was carried on.”

38 After section 76ZG insert—

“76ZH Payments in respect of employment in more than one capacity

(1) This section applies if the payment is in respect of the employee’s employment with the employer—

(a) partly in the employer’s life assurance business, and

(b) partly in one or more other capacities.

(2) The amount of the redundancy payment, or the amount which would have been due if a redundancy payment had been payable, is to be apportioned on a just and reasonable basis between—

(a) the employment in the life assurance business, and

(b) the employment in the other capacities.

(3) The part of the payment apportioned to the employment in the life assurance business is treated as a payment in respect of the employee’s employment wholly in the life assurance business for the purposes of section 76ZG.”

39 After section 76ZH insert—

“76ZI Additional payments

(1) This section applies if the employer’s business, or part of it, ceases (permanently) to be carried on and the employer makes a payment to the employee in addition to—

(a) the redundancy payment, or

(b) if an approved contractual payment is made, the amount that would have been due if a redundancy payment had been payable.

(2) If—

(a) the additional payment would not otherwise be regarded as expenses payable for the purposes of section 76, but

(b) that is only because the business, or the part of the business, has ceased to be carried on,

the additional payment is regarded as expenses payable for the purposes of section 76.

(3) So far as the additional payment would, apart from this subsection, be regarded as expenses payable for the purposes of Step 5 in subsection (7) of section 76, it is not to be so regarded for the purposes of that subsection (or of subsection (2) above so far as relating to section 76).

(4) The amount treated under this section as expenses payable for the purposes of section 76 is limited to 3 times the amount of—

(a) the redundancy payment, or

(b) if an approved contractual payment is made, the amount that would have been due if a redundancy payment had been payable.

(5) If the payment is referable to an accounting period beginning after the business or the part of the business has ceased to be carried on, it is treated as referable to the last accounting period in which the business, or the part concerned, was carried on.”

40 After section 76ZI insert—

“76ZJ Payments by the Government

(1) This section applies if—

(a) a redundancy payment or an approved contractual payment is payable by a company to which section 76 applies (“the employer”), and

(b) a payment to which subsection (2) applies is made in respect of the payment.

(2) This subsection applies to—

(a) payments made by the Secretary of State under section 167 of the Employment Rights Act 1996, and

(b) payments made by the Department for Employment and Learning under Article 202 of the Employment Rights (Northern Ireland) Order 1996.

(3) So far as the employer reimburses the Secretary of State or Department for the payment, sections 76ZG to 76ZI apply as if the payment were—

(a) a redundancy payment, or

(b) an approved contractual payment,

made by the employer.”

41 After section 76ZJ insert—

“Contributions to local enterprise organisations or urban regeneration companies

76ZK Contributions to local enterprise organisations or urban regeneration companies

(1) This section applies if a company to which section 76 applies (“the contributor”) incurs expenses in making a contribution (whether in cash or in kind)—

(a) to a local enterprise organisation, or

(b) to an urban regeneration company.

(2) The expenses are treated for the purposes of section 76 as expenses payable which fall to be brought into account at Step 1 in section 76(7).

(3) But if, in connection with the making of the contribution, the contributor or a connected person—

(a) receives a disqualifying benefit of any kind, or

(b) is entitled to receive such a benefit,

the amount treated in accordance with subsection (2) is restricted to the amount of the expenses less the value of the benefit.

(4) For this purpose it does not matter whether a person receives, or is entitled to receive, the benefit—

(a) from the local enterprise organisation or urban regeneration company concerned, or

(b) from anyone else.

(5) Subsection (6) applies if—

(a) an amount has been brought into account in accordance with subsection (2), and

(b) the contributor or a connected person receives a disqualifying benefit that is in any way attributable to the contribution.

(6) The contributor is to be treated as receiving, when the benefit is received, an amount—

(a) which is equal to the value of the benefit (so far as not brought into account in determining the amount of the deduction), and

(b) to which the charge to corporation tax on income applies.

(7) In this section—

• “disqualifying benefit” means a benefit the expenses of obtaining which, if incurred by the contributor directly in a transaction at arm’s length, would not be expenses payable for the purposes of section 76,

• “local enterprise organisation” has the meaning given by section 83 of CTA 2009,

• “urban regeneration company” has the meaning given by section 86 of CTA 2009.

(8) Section 839 (“connected person”) applies for the purposes of subsections (3) and (5).”

42 After section 76ZK insert—

“Unpaid remuneration

76ZL Unpaid remuneration

(1) This section applies if—

(a) an amount is charged in respect of employees' remuneration in the accounts for a period of a company to which section 76 applies,

(b) the amount would apart from this section be brought into account under section 76 as expenses payable, and

(c) the remuneration is not paid before the end of the period of 9 months immediately following the end of the period of account.

(2) If the remuneration is paid after the end of that period of 9 months, the amount is brought into account for the period of account in which it is paid.

(3) But—

(a) subsection (2) is subject to section 86 of FA 1989 (spreading of relief for acquisition expenses), and

(b) in interpreting that section the remuneration is treated as expenses payable which fall to be included at Step 1 in section 76(7) for the period of account in which the remuneration is paid.

(4) The amount is not brought into account under section 76 as expenses payable if it is not paid.”

43 After section 76ZL insert—

“76ZM Unpaid remuneration: supplementary

(1) For the purposes of section 76ZL an amount charged in the accounts in respect of employees' remuneration includes an amount for which provision is made in the accounts with a view to its becoming employees' remuneration.

(2) For the purposes of section 76ZL it does not matter whether an amount is charged for—

(a) particular employments, or

(b) employments generally.

(3) If the profits of the company are calculated before the end of the 9 month period mentioned in section 76ZL(1)(c)—

(a) it must be assumed, in making the calculation, that any remuneration which is unpaid when the calculation is made will not be paid before the end of that period, but

(b) if the remuneration is subsequently paid before the end of that period, nothing in this subsection prevents the calculation being revised and any tax return being amended accordingly.

(4) For the purposes of this section and section 76ZL remuneration is paid when it—

(a) is treated as received by an employee for the purposes of ITEPA 2003 by section 18 or 19 of that Act (receipt of money and non-money earnings), or

(b) would be so treated if it were not exempt income.

(5) In this section and section 76ZL—

• “employee” includes an office-holder and “employment” therefore includes an office, and

• “remuneration” means an amount which is or is treated as earnings for the purposes of Parts 2 to 7 of ITEPA 2003.”

44 After section 76ZM insert—

“Car or motor cycle hire

76Z Car or motor cycle hire

(1) Subsection (2) applies if—

(a) in calculating the corporation tax to which a company is liable for an accounting period, an amount representing expenses incurred on the hiring of a car or motor cycle can be brought into account under section 76 as expenses payable,

(b) the car or motor cycle is not a qualifying hire car or motor cycle, and

(c) the retail price of the car or motor cycle when new exceeds £12,000.

(2) The amount that would otherwise be capable of being brought into account as expenses payable is reduced by multiplying the amount by the fraction—

where RP is the retail price of the car or motor cycle when new.

(3) Subsection (4) applies if an amount is reduced as a result of subsection (2), or a corresponding provision, and—

(a) subsequently—

(i) there is a rebate (however described) of the hire charges, or

(ii) a debt in respect of any of the hire charges is released otherwise than as part of a statutory insolvency agreement, and

(b) an amount is brought into account in respect of the rebate or release.

(4) For the purposes of subsection (3)(b) an amount is brought into account in respect of a rebate of hire charges or the release of a debt if—

(a) the amount of a reversal representing the rebate or release falls to be deducted under Step 4 in section 76(7), or

(b) (in the case of a rebate of hire charges) an amount representing the rebate is chargeable under section 85(1) of the Finance Act 1989 (c. 26).

(5) The amount that would otherwise be deductible as mentioned in subsection (4)(a) or chargeable as mentioned in subsection (4)(b) is reduced by multiplying it by the fraction set out in subsection (2).

(6) In this section “corresponding provision” means—

(a) section 56(2) of CTA 2009 (car or motor cycle hire: trade profits and property income),

(b) section 1251(2) of CTA 2009 (car or motor cycle hire: companies with investment business), and

(c) section 48(2) of ITTOIA 2005 (car or motor cycle hire: trade profits and property income).

(7) The power under section 74(4) of CAA 2001 to increase or further increase the sums of money specified in Chapter 8 of Part 2 of CAA 2001 includes the power to increase or further increase the sum of money specified in subsection (1)(c) or (2).

(8) In this section “car or motor cycle” and “qualifying hire car or motor cycle” have the meanings given by section 57 of CTA 2009.”

45 After section 76ZN insert—

“76ZO Hiring cars (but not motor cycles) with low CO₂ emissions before 1 April 2013

(1) Section 76ZN does not apply to expenses incurred on the hiring of a car with low CO₂ emissions, or an electrically-propelled car, if—

(a) the car was first registered on or after 17 April 2002, and

(b) the period of hire begins before 1 April 2013 under a contract entered into before that date.

(2) For this purpose—

• “car with low CO₂ emissions” has the meaning given by section 45D of CAA 2001, and

• “electrically-propelled car” has the meaning given by that section.”

46 Omit section 76A (levies and repayments under FISMA 2000).

47 Omit section 76B (levies and repayments under the FISMA 2000: investment companies).

48 Omit section 79 (contributions to local enterprise agencies).

49 Omit section 79A (contributions to training and enterprise councils and local enterprise companies).

50 Omit section 79B (contributions to urban regeneration companies).

51 Omit section 82A (expenditure on research and development).

52 Omit section 82B (payments to research associations, universities etc).

53 Omit section 83 (patent fees etc and expenses).

54 Omit section 83A (gifts in kind to charities etc).

55 Omit section 84 (gifts to educational establishments).

56 (1) Amend section 84A (costs of establishing share option or profit sharing schemes: relief) as follows.

(2) In subsection (2)—

(a) in paragraph (a) omit “Schedule D or”,

(b) omit paragraph (b) and the “or” immediately before it, and

(c) omit paragraph (c).

(3) Omit subsection (3ZA)(b).

57 Omit section 85 (payments to trustees of approved profit sharing schemes).

58 Omit section 85A (costs of establishing employee share ownership trust: relief).

59 Omit section 85B (which introduces Schedule 4AA).

60 Omit section 86 (employees seconded to charities and educational establishments).

61 Omit section 86A (charitable donations: contributions to agent’s expenses).

62 Omit sections 87 and 87A (taxable premiums etc).

63 Omit section 88 (payments to Export Credits Guarantee Department).

64 Omit section 88D (restriction of deductions in respect of certain debts).

65 Omit section 89 (debts proving to be irrecoverable after discontinuance etc).

66 Omit section 90 (additional payments to redundant employees).

67 Omit section 91 (cemeteries).

68 Omit section 91A (waste disposal: restoration payments).

69 Omit sections 91B and 91BA (waste disposal: preparation expenditure).

70 Omit section 91C (mineral exploration and access).

71 Omit section 92 (regional development grants).

72 Omit section 93 (other grants under Industrial Development Act 1982 etc).

73 Omit section 94 (debts deducted and subsequently released).

74 Omit section 95 (taxation of dealers in respect of distributions etc).

75 In section 95ZA(1) (taxation of UK distributions received by insurance companies) for “section 208” substitute “section 1285 of CTA 2009”.

76 Omit section 97 (treatment of farm animals etc).

77 Omit section 98 (tied premises: receipts and expenses treated as those of trade).

78 Omit section 99 (dealers in land).

79 Omit section 100 (valuation of trading stock at discontinuance of trade).

80 Omit section 101 (valuation of work in progress at discontinuance of profession or vocation).

81 Omit section 102 (provisions supplementary to sections 100 and 101).

82 Omit sections 103 to 106 (Case VI charges on receipts).

83 Omit section 110 (interpretation etc).

84 Omit section 111(1) (treatment of partnerships).

85 Omit sections 114 and 115 (special rules for computing profits and losses).

86 (1) Amend section 116 (arrangements for transferring relief) as follows.

(2) In subsection (4) for “under Case VI of Schedule D” substitute “under or by virtue of any provision to which section 834A (miscellaneous charges) applies”.

(3) Omit subsection (5).

87 Omit section 118ZA (treatment of limited liability partnerships).

88 Omit section 119 (rent etc payable in connection with mines, quarries and similar concerns).

89 Omit section 120 (rent etc payable in respect of electric line wayleaves).

90 Omit section 121 (management expenses of owner of mineral rights).

91 Omit section 122 (relief in respect of mineral royalties).

92 Omit section 125 (annual payments for dividends or non-taxable consideration).

93 Omit section 128(2) and (3) (commodity and financial futures etc: losses and gains).

94 (1) Amend section 130 (meaning of “company with investment business” and “investment company” in Part 4) as follows.

(2) Omit ““company with investment business” means any company whose business consists wholly or partly in the making of investments”.

(3) For the title substitute “Meaning of “investment company” in Part 4”.

95 In section 187(10) (interpretation of sections 185 and 186) for “, within the meaning of section 486,” substitute “, as defined in section 834(1)”.

96 Omit section 208 (UK company distributions not generally chargeable to corporation tax).

97 (1) Amend section 209 (meaning of distribution) as follows.

(2) In subsection (2)(e) at the beginning insert “subject to subsection (6A),”.

(3) After subsection (6) insert—

“(6A) Relevant alternative finance return shall not be treated as a distribution for the purposes of the Corporation Tax Acts by virtue of subsection (2)(e)(iii).

In this subsection “relevant alternative finance return”—

(a) for corporation tax purposes means anything that is alternative finance return for the purposes of Part 6 of CTA 2009 as a result of section 513 of that Act or any part of the redemption payment under arrangements to which section 507 of that Act applies (investment bond arrangements), and

(b) for income tax purposes means anything that is alternative finance return for the purposes of Chapter 5 of Part 2 of the Finance Act 2005 as a result of section 48B(1), 49(2) or 49A(2) of that Act or any part of the redemption payment under arrangements to which section 48A of that Act applies (alternative finance investment bonds).”

98 In section 212(3) (interest etc paid in respect of certain securities) for “section 208” substitute “section 1285 of CTA 2009 (exemption for UK company distributions)”.

99 (1) Amend section 214 (chargeable payments connected with exempt distributions) as follows.

(2) In subsection (1)(c) for “section 337A(1)” substitute “section 1305(1) of CTA 2009 (denial of deduction for distributions)”.

(3) For subsection (1B) substitute—

“(1B) So far as relating to corporation tax, the charge to tax under subsection (1) has effect as an application of the charge to corporation tax on income.”

100 In Chapter 3 of Part 6 (matters which are not distributions for the purposes of the Corporation Tax Acts) after section 230 insert—

“Industrial and provident society dividends etc

230A Dividend or bonus granted by industrial and provident society

(1) This section applies if—

(a) a dividend or bonus is granted by a registered industrial and provident society, and

(b) section 132 (deduction for dividends etc granted by industrial and provident societies) of CTA 2009 allows the sum representing the dividend or bonus to be deducted in calculating the profits of a trade.

(2) The dividend, or the bonus, is not treated as a distribution for the purposes of the Corporation Tax Acts.”

101 In section 231AA(3) (no tax credit for borrower under stock lending arrangement or interim holder under repurchase agreement) for “Schedule 13 to the Finance Act 2007” substitute “Chapter 10 of Part 6 of CTA 2009 (repos)”.

102 In section 231AB(2) (no tax credit for original owner under repurchase agreement in respect of certain manufactured dividends) for “Schedule 13 to the Finance Act 2007” substitute “Chapter 10 of Part 6 of CTA 2009 (repos)”.

103 Omit section 337 (company beginning or ceasing to carry on trade).

104 (1) Amend section 337A (computation of company’s profits or income: exclusion of general deductions) as follows.

(2) Omit subsection (1)(a).

(3) In subsection (2)—

(a) in paragraph (a) for “Chapter 2 of Part 4 of the Finance Act 1996” substitute “Part 5 of CTA 2009”, and

(b) omit paragraph (b) and the “and” immediately before it.

105 (1) Amend section 342 (tax on companies in liquidation) as follows.

(2) In subsection (3A) for “section 12(7)” substitute “section 12(4) of CTA 2009”.

(3) In subsection (5) for “section 12(7)” substitute “section 12(4) of CTA 2009”.

(4) In subsection (6) for “section 12(7)” substitute “section 12(4) of CTA 2009”.

106 (1) Amend section 342A (tax on companies in administration) as follows.

(2) In subsection (7) for “section 12(3)” substitute “section 10(1) of CTA 2009”.

(3) In subsection (8) for “section 12(3)” substitute “section 10(1) of CTA 2009”.

(4) For subsection (9) substitute—

“(9) Section 342(7) applies in relation to this section as it applies in relation to that section, except that the reference to the completion of the winding up is to be read as a reference to the relevant event.”

107 In section 343(2) (company reconstructions without change of ownership)—

(a) for the words from the beginning to “but—” substitute “In the circumstances mentioned in subsection (1)—”, and

(b) in paragraph (a) for “those Acts” substitute “the Capital Allowances Act (including enactments which under this Act are to be treated as contained in that Act)”.

108 (1) Amend section 392A (Schedule A losses) as follows.

(2) In subsection (1) for “Schedule A loss” substitute “UK property business loss”.

(3) In subsection (2)—

(a) for “Schedule A loss”, in each place where it occurs, substitute “UK property business loss”, and

(b) for “Schedule A business” substitute “UK property business”.

(4) In subsection (3)—

(a) for paragraph (a) substitute—

“(a) ceases to carry on a UK property business, or to be within the charge to corporation tax in respect of such a business, but”, and

(b) in the words after paragraph (b), for “Schedule A loss” substitute “UK property business loss” and for “section 75” substitute “Chapter 2 of Part 16 of CTA 2009”.

(5) In subsection (4)—

(a) in paragraph (a) for ““Schedule A loss”” substitute ““UK property business loss”” and for “Schedule A business” substitute “UK property business”, and

(b) in paragraph (b) for “the same meaning as in Part IV” substitute “the meaning given by section 1218 of CTA 2009”.

(6) In subsection (5) for “Schedule A business” substitute “UK property business”.

(7) For the title substitute “UK property business losses”.

(8) In the cross-heading immediately before the section for “Schedule A business” substitute “UK property business”.

109 In section 392B(2) (losses from overseas property business) for “Schedule A business” substitute “UK property business”.

110 In section 393(8)(a) (losses other than terminal losses) for “Case I or V of Schedule D,” substitute “Chapter 2 of Part 3 of CTA 2009,”.

111 In section 393A(3) (losses: set off against profits of the same, or an earlier, accounting period) for “falling within Case V of Schedule D:” substitute “carried on wholly outside the United Kingdom:”.

112 (1) Amend section 396 (Case VI losses) as follows.

(2) In subsection (1)—

(a) for “under Case VI of Schedule D” substitute “under or by virtue of a relevant provision”, and

(b) for “under that Case” substitute “charged under or by virtue of a provision to which section 834A (miscellaneous charges) applies”.

(3) For subsection (2) substitute—

“(2) In this section “relevant provision” means any provision to which section 834A applies, except section 761(1)(b)(ii) (offshore income gains).”

(4) After subsection (2) insert—

“(2A) Subsection (2B) applies to any loss made by a company in a transaction if—

(a) the transaction was of such a nature that, if any profits had arisen from it, the company would have been liable to corporation tax in respect of the profits under Case VI of Schedule D for an accounting period ending before 1 April 2009, and

(b) the transaction—

(i) did not fall within section 34, 35 or 36 (lease premiums etc), and

(ii) was not a disposal made after 31 March 2007 to which Chapter 5 of Part 17 (offshore funds) applied.

(2B) So far as relief for the loss has not previously been given, the loss is to be treated as a loss to be set off against income in accordance with subsection (1).”

(5) For the title substitute “Losses from miscellaneous transactions”.

113 (1) Amend section 397 (restriction on relief in case of farming and market gardening) as follows.

(2) In subsection (7) for the words from “Case I” to “ITTOIA 2005” substitute “the calculation of the profits of a trade in Part 3 of CTA 2009 (or in Part 2 of ITTOIA 2005)”.

(3) In subsection (8)—

(a) in the words before paragraph (a), after “subsection” insert “a trade shall be treated as discontinued, and a new trade set up in the event of any of the following—”,

(b) for paragraph (a) and the “and” immediately after it substitute—

“(a) a company starting or ceasing to be within the charge to corporation tax in respect of a trade;”,

(c) in paragraph (b) for the words from the beginning to “the trade” substitute “a change in the persons carrying on a trade”, and

(d) after paragraph (b) insert “; or

(c) a change in the persons carrying on a trade not falling within paragraph (b) if—

(i) immediately before the change the trade is carried on by companies in partnership and by no other person, and

(ii) after the change none of those companies continues to carry on the trade in partnership.”

(4) In subsection (9) for the words from “if” to the end substitute “if the change in the persons carrying on the trade is a cessation to which section 343(1) applies.”

114 In section 398(b) for “Schedule D” substitute “Part 5 of CTA 2009 (loan relationships)”.

115 (1) Amend section 399 (dealings in commodity futures etc: withdrawal of loss relief) as follows.

(2) Omit subsection (1B).

(3) In subsection (3) omit the words “under Case VI of Schedule D”.

116 (1) Amend section 400 (write-off of government investment) as follows.

(2) In subsection (2)—

(a) in paragraph (b) for the words from “Part 4” to the end substitute “Part 16 of CTA 2009, any excess that falls to be deducted under section 1223(3) of that Act;”,

(b) in paragraph (bb)(ii) for “section 75” substitute “Chapter 2 of Part 16 of CTA 2009”, and

(c) in paragraph (d) for “under 75(3) or 393(9)” substitute “under section 393(9) of this Act or section 1223 of CTA 2009”.

(3) In subsection (6) for “Case I or II of Schedule D.” substitute “Part 3 of CTA 2009.”

(4) In subsection (9A) for “section 80(5) of the Finance Act 1996” and “Chapter II of Part IV of that Act” substitute “section 464(1) of CTA 2009” and “Part 5 of that Act” respectively.

117 Omit section 401 (relief for pre-trading expenditure).

118 (1) Amend section 403 (amounts which may be surrendered by way of group relief) as follows.

(2) In subsection (1)(b) for “Schedule A losses” substitute “UK property business losses”.

(3) In subsection (3) for “Schedule A losses”, in each place where those words occur, substitute “UK property business losses”.

119 In section 403ZC(1) (amounts eligible for group relief: non-trading deficit on loan relationships) for “section 83 of the Finance Act 1996” substitute “Chapter 16 of Part 5 of CTA 2009 (non-trading deficits)”.

120 (1) Amend section 403ZD (other amounts available by way of group relief) as follows.

(2) In subsection (1) for “Schedule A losses” substitute “UK property business losses”.

(3) In subsection (3)—

(a) for “Schedule A loss” substitute “UK property business loss”, and

(b) for “Schedule A business” substitute “UK property business”.

(4) In subsection (4)—

(a) for “section 75(1) (expenses of management of a company with investment business)” substitute “section 1219 of CTA 2009 (expenses of management of a company’s investment business)”, and

(b) for “section 75(9) or 392A” substitute “section 392A above or section 1223(3) of CTA 2009”.

(5) In subsection (6) for “Schedule 29 to the Finance Act 2002” and “paragraph 35(3) of that Schedule” substitute “Part 8 of CTA 2009 (intangible fixed assets)” and “section 753(3) of that Act” respectively.

121 In section 403ZE(1)(b)(ii) (computation of gross profits) for “75(9) or 392A(3)” substitute “392A(3) above or section 1223(3) of CTA 2009”.

122 (1) Amend section 404 (limitation of group relief in relation to certain dual resident companies) as follows.

(2) In subsection (2)(a) for “Schedule A loss” substitute “UK property business loss”.

(3) In subsection (6)(a)(ia) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”.

(4) In subsection (7) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009 (see section 302(6) of that Act)”.

123 In section 407 (relationship between group relief and other relief)—

(a) in subsection (1)(b) for “section 83” to “1996” substitute “section 388, 389 or 391 or Chapter 16 of Part 5 of CTA 2009”, and

(b) in subsection (2)(c) for “section 83(2)” to “1996” substitute “section 389 or 459 of CTA 2009”.

124 After section 411 insert—

“411ZA No relief where deduction of relevant return under alternative finance arrangements disallowed

(1) This section applies if the surrendering company is prevented from obtaining a deduction in respect of an amount by section 520 of CTA 2009 (provision not at arm’s length: non-deductibility of relevant return).

(2) The amount may not be surrendered by way of group relief.”

125 In section 414(1)(b) (close companies) omit “within the meaning of section 486(12)”.

126 (1) Amend section 431 (interpretation of provisions relating to insurance companies) as follows.

(2) In subsection (2)—

(a) in paragraph (b) of the definition of “free assets amount” for “Chapter 2 of Part 4 of the Finance Act 1996” substitute “Part 5 of CTA 2009 (see section 303 of that Act)”,

(b) in the definition of “the I minus E basis” for “Case I of Schedule D” substitute “section 35 of CTA 2009 (charge on trade profits)”,

(c) at the appropriate place insert—

““life assurance trade profits provisions” means the provisions applicable for the purposes of the taxation under section 35 of CTA 2009 (charge on trade profits) of the profits of life assurance business carried on by an insurance company;”, and

(d) in the definition of “net value” for “Chapter 2 of Part 4 of the Finance Act 1996” substitute “Part 5 of CTA 2009: see section 303 of that Act”.

(3) In subsection (2YC)(a) omit “under Schedule A or Case III, V or VI of Schedule D”.

(4) In subsection (2YD)(a) for “paragraph 4 of Schedule 11 to the Finance Act 1996” substitute “sections 387 to 391 of CTA 2009”.

127 (1) Amend section 431G (company carrying on life assurance business) as follows.

(2) In subsection (3) for “in accordance with Case I of Schedule D” substitute “under section 35 of CTA 2009 (charge on trade profits)”.

(3) In subsection (4) for “in accordance with Case I of Schedule D” substitute “under section 35 of CTA 2009”.

(4) In subsection (5) for “provision of Case I of Schedule D” substitute “of the life assurance trade profits provisions”.

128 In section 431H(3) (company carrying on life assurance business and other insurance business) for “Case I of Schedule D” substitute “section 35 of CTA 2009 (charge on trade profits)”.

129 (1) Amend section 432YA (long-term business other than life assurance business_adjustment consequent on change in Insurance Prudential Sourcebook) as follows.

(2) In subsection (2) for “to Case I of Schedule D” substitute “for the purposes of section 35 of CTA 2009 (charge on trade profits)”.

(3) In subsection (6) for paragraph (b) and the word “and” immediately before it substitute—

“(b) the reference in section 82E(4) to life assurance business were a reference to PHI business, and

(c) the reference in section 82E(7) to the life assurance trade profits provisions were a reference to the provisions applicable for the purposes of section 35 of CTA 2009.”

130 (1) Amend section 432A (apportionment of income and gains) as follows.

(2) In subsection (1ZA)—

(a) in paragraph (a) for “Schedule A in respect of any separate Schedule A” substitute “Chapter 3 of Part 4 of CTA 2009 (profits of a property business) in respect of any separate UK property”,

(b) for paragraph (b) substitute—

“(b) income chargeable under Chapter 3 of Part 4 of CTA 2009 in respect of distributions treated by section 121(1)(a) of the Finance Act 2006 as profits of a UK property business carried on by the company,”,

(c) in paragraph (c) for “Case V of Schedule D” substitute “Chapter 3 of Part 4 of CTA 2009”,

(d) for paragraph (d) substitute—

“(d) income chargeable under Chapter 2 of Part 10 of CTA 2009 (dividends of non-UK resident companies) or Chapter 6 of that Part (sale of foreign dividend coupons),

(da) income chargeable under Chapter 7 of Part 10 of CTA 2009 (annual payments not otherwise charged) or Chapter 8 of that Part (income not otherwise charged) which arises from a source outside the United Kingdom,”,

(e) in paragraph (f) for “Chapter 2 of Part 4 of the Finance Act 1996” substitute “Part 5 of CTA 2009”,

(f) in paragraph (g) for “Schedule 26 to the Finance Act 2002” substitute “Part 7 of CTA 2009”,

(g) in paragraph (h) for the words from “Case III” to the end substitute “Chapter 5 of Part 10 of CTA 2009 (distributions from unauthorised unit trusts) or Chapter 7 of that Part (annual payments not otherwise charged)”,

(h) in paragraph (i) for “Part 3 of Schedule 29 to FA 2002” substitute “Chapter 2 of Part 8 of CTA 2009”, and

(i) in paragraph (j) for “Case VI of Schedule D” substitute “any provision to which section 834A (miscellaneous charges) applies”.

(3) In subsection (1ZB)—

(a) in paragraph (a) for “Schedule A businesses” substitute “UK property businesses”,

(b) in paragraph (c) for “Chapter 2 of Part 4 of the Finance Act 1996” substitute “Part 5 of CTA 2009”,

(c) in paragraph (d) for “Schedule 26 to the Finance Act 2002” substitute “Part 7 of CTA 2009”,

(d) in paragraph (e) for “Part 2 of Schedule 29 to FA 2002” substitute “Chapter 3 of Part 8 of CTA 2009”, and

(e) in paragraph (f) for “Case VI of Schedule D” substitute “any provision to which section 834A applies”.

131 (1) Amend section 432AA (Schedule A business or overseas property business) as follows.

(2) In subsection (1) for “is treated as carrying on separate Schedule A businesses or overseas property businesses” substitute “is treated (despite sections 205 and 206 of CTA 2009) as carrying on separate UK property businesses or overseas property businesses”.

(3) For the title substitute “UK property business or overseas property business”.

132 (1) Amend section 432AB (losses from Schedule A business or overseas property business) as follows.

(2) In subsection (1) for “Schedule A business” substitute “UK property business”.

(3) In subsection (4)(a) for “Schedule A business” substitute “UK property business”.

(4) In the title for “Schedule A business” substitute “UK property business”.

133 In section 434(1) (franked investment income etc) for “provisions applicable to Case I of Schedule D” substitute “life assurance trade profits provisions”.

134 (1) Amend section 434A (computation of losses and limitation of relief) as follows.

(2) In subsection (2) for the words “provisions of this Act applicable to Case I of Schedule D” substitute “life assurance trade profits provisions”.

(3) In subsection (2A)—

(a) omit the words from “which” to “1996”, and

(b) for “Chapter II of Part IV of that Act” substitute “Part 5 of CTA 2009”.

135 (1) Amend section 436A (gross roll-up business: separate charge on profits) as follows.

(2) For subsection (1) substitute—

“(1) The charge to corporation tax on income applies to profits arising to an insurance company from gross roll-up business.”

(3) In subsection (2)(b) for “provisions of this Act applicable to Case I of Schedule D” substitute “life assurance trade profits provisions”.

(4) In subsection (7) for “Case I of Schedule D” substitute “section 35 of CTA 2009 (charge on trade profits)”.

136 In section 440(6) (transfers of assets etc) for “in accordance with Case I of Schedule D” substitute “under section 35 of CTA 2009 (charge on trade profits)”.

137 In section 440A(7) (securities) for “in accordance with Case I of Schedule D” substitute “under section 35 of CTA 2009 (charge on trade profits)”.

138 (1) Amend section 440B (modifications where tax charged under Case I of Schedule D) as follows.

(2) In subsection (1) for “in accordance with Case I of Schedule D” substitute “under section 35 of CTA 2009 (charge on trade profits)”.

(3) In subsection (4A) for “in accordance with Case I of Schedule D” substitute “under section 35 of CTA 2009”.

(4) In subsection (4B) for “in accordance with Case I of Schedule D” substitute “under section 35 of CTA 2009”.

(5) In the title for “Case I of Schedule D” substitute “section 35 of CTA 2009”.

139 (1) Amend section 440C (modifications for change of tax basis) as follows.

(2) In subsection (1)(b) for “in accordance with Case I of Schedule D” substitute “under section 35 of CTA 2009 (charge on trade profits)”.

(3) In subsection (4)—

(a) in paragraph (a) for “in accordance with Case I of Schedule D” substitute “under section 35 of CTA 2009”, and

(b) in paragraph (c) for “in accordance with Case I of Schedule D” substitute “under section 35 of CTA 2009”.

(4) In subsection (6)(b) for “in accordance with Case I of Schedule D” substitute “under section 35 of CTA 2009”.

(5) In subsection (7)(b) for “in accordance with Case I of Schedule D” substitute “under section 35 of CTA 2009”.

140 In section 442(2) (overseas business of UK companies) for “of this Act applicable to Case I of Schedule D” substitute “applicable for the purposes of section 35 of CTA 2009 (charge on trade profits)”.

141 In section 442A(1) (taxation of investment return where risk reinsured) for “Case VI of Schedule D” substitute “the charge to corporation tax on income”.

142 (1) Amend section 444AZA (transfers of life assurance business: Case VI losses of the transferor) as follows.

(2) In subsection (1)(c) for “in accordance with Case I of Schedule D” substitute “under section 35 of CTA 2009 (charge on trade profits)”.

(3) In subsection (2)—

(a) for ““Case VI loss”” substitute ““qualifying loss of the transferor””, and

(b) omit “(a “Case I loss”)”.

(4) In subsection (4) for “Case VI loss” substitute “qualifying loss of the transferor”.

(5) In the title for “Case VI” substitute “gross roll-up business”.

143 (1) Amend section 444AZB (transfers of life assurance business: Case I losses of the transferor) as follows.

(2) In subsection (1)(b) for “in accordance with Case I of Schedule D” substitute “under section 35 of CTA 2009 (charge on trade profits)”.

(3) In subsection (2)—

(a) for ““Case I loss”” substitute ““qualifying loss of the transferor””, and

(b) omit “(a “Case VI loss”)”.

(4) In subsection (4) for “Case I loss” substitute “qualifying loss of the transferor”.

(5) In the title for “Case I” substitute “trade”.

144 In section 444ABD(1A) (transferor’s period of account including transfer)—

(a) for “in accordance with Case I of Schedule D”, in the first place where it occurs, substitute “under section 35 of CTA 2009 (charge on trade profits)”, and

(b) for “in accordance with Case I of Schedule D”, in the second place where it occurs, substitute “under section 35 of that Act”.

145 (1) Amend section 444AEA (transfer schemes: anti-avoidance rule) as follows.

(2) In subsection (1)—

(a) in paragraph (a) for “Case I” substitute “life assurance trade profits”, and

(b) in paragraph (b) omit “Case I”.

(3) In subsection (3)—

(a) for “Case I advantage” substitute “life assurance trade profits advantage”, and

(b) omit “transferor’s Case I”.

(4) In subsection (4)—

(a) for “Case I advantage” substitute “life assurance trade profits advantage”, and

(b) omit “transferee’s Case I”.

146 (1) Amend section 444AEB (Case I advantage: transferor) as follows.

(2) In subsection (1)—

(a) for “Case I advantage” substitute “life assurance trade profits advantage”, and

(b) in paragraphs (a) and (b) for “Case I” substitute “section 35”.

(3) In subsection (2)—

(a) for “a Case I advantage” substitute “a life assurance trade profits advantage”,

(b) for “the Case I advantage” substitute “the advantage”, and

(c) in paragraphs (a) and (b) for “Case I” substitute “section 35”.

(4) In subsection (4)—

(a) for ““Case 1 profits”” substitute ““section 35 profits””,

(b) for ““Case 1 losses”” substitute ““section 35 losses””, and

(c) for “provisions of Case I of Schedule D” substitute “life assurance trade profits provisions”.

(5) In the title for “Case I” substitute “Life assurance trade profits”.

147 (1) Amend section 444AEC (Case I advantage: transferee) as follows.

(2) In subsection (1)—

(a) for “Case I advantage” substitute “life assurance trade profits advantage”, and

(b) in paragraphs (a) and (b) for “Case I” substitute “section 35”.

(3) In subsection (2)—

(a) for “a Case I advantage” substitute “a life assurance trade profits advantage”,

(b) for “the Case I advantage” substitute “the advantage”, and

(c) in paragraphs (a) and (b) for “Case I” substitute “section 35”.

(4) In subsection (4) for “Case I”, in both places where it occurs, substitute “section 35”.

(5) In the title for “Case I” substitute “Life assurance trade profits”.

148 (1) Amend section 444AECA (parts of transfer scheme arrangements: anti-avoidance rule) as follows.

(2) In subsection (1)—

(a) in paragraph (a) for “Case I” substitute “life assurance trade profits”, and

(b) in paragraph (b) omit “Case I”.

(3) In subsection (3)—

(a) for “Case I advantage” substitute “life assurance trade profits advantage”, and

(b) omit “transferor’s Case I”.

(4) In subsection (4)—

(a) for “Case I advantage” substitute “life assurance trade profits advantage”, and

(b) omit “transferee’s Case I”.

149 (1) Amend section 444AECB (parts of transfer scheme arrangements: Case I advantage transferor) as follows.

(2) In subsection (1)—

(a) for “Case I advantage” substitute “life assurance trade profits advantage”, and

(b) in paragraphs (a) and (b) for “Case I” substitute “section 35”.

(3) In subsection (2)—

(a) for “Case I profits” substitute “section 35 profits”,

(b) for “Case I losses” substitute “section 35 losses”, and

(c) for “Case I advantage” substitute “life assurance trade profits advantage”.

(4) In subsection (3)—

(a) for “a Case I advantage” substitute “a life assurance trade profits advantage”,

(b) for “the Case I advantage” substitute “the advantage”, and

(c) in paragraphs (a) and (b) for “Case I” substitute “section 35”.

(5) In subsection (5)—

(a) for “a Case I advantage” substitute “a life assurance trade profits advantage”, and

(b) for “the Case I advantage” substitute “the advantage”.

(6) In subsection (6) for “Case I”, in both places where it occurs, substitute “section 35”.

(7) In the title for “Case I” substitute “life assurance trade profits”.

150 (1) Amend section 444AECC (parts of transfer scheme arrangements: Case I advantage transferee) as follows.

(2) In subsection (1)—

(a) for “Case I advantage” substitute “life assurance trade profits advantage”, and

(b) in paragraphs (a) and (b) for “Case I” substitute “section 35”.

(3) In subsection (2)—

(a) for “Case I profits” substitute “section 35 profits”,

(b) for “Case I losses” substitute “section 35 losses”, and

(c) for “Case I advantage” substitute “life assurance trade profits advantage”.

(4) In subsection (3)—

(a) for “a Case I advantage” substitute “a life assurance trade profits advantage”,

(b) for “the Case I advantage” substitute “the advantage”, and

(c) in paragraphs (a) and (b) for “Case I” substitute “section 35”.

(5) In subsection (5) for “Case I”, in both places where it occurs, substitute “section 35”.

(6) In the title for “Case I” substitute “life assurance trade profits”.

151 (1) Amend section 444AED (clearance: no avoidance or group advantage) as follows.

(2) In subsection (2) for “Case I”, in both places where it occurs, substitute “life assurance trade profits”.

(3) In subsection (3) for “Case I”, in both places where it occurs, substitute “life assurance trade profits”.

152 In section 444AF(5) (demutualisation surplus: life assurance business)—

(a) in paragraph (a) for “provisions of this Act applicable to Case I of Schedule D” substitute “life assurance trade profits provisions”, and

(b) in paragraph (b) omit “under Case VI of Schedule D”.

153 In section 444AH (modification of section 444AG etc for Case VI businesses) in the heading for “Case VI” substitute “gross roll-up”.

154 In section 444AK(3) (mutual surplus: gross roll-up business) for “provisions of this Act applicable to Case I of Schedule D” substitute “life assurance trade profits provisions”.

155 In section 444BA(1) (equalisation reserves for general business) for “Case I or V of Schedule D” substitute “section 35 of CTA 2009 (charge on trade profits)”.

156 In section 444BB(2) (modification of section 444BA for mutual or overseas business and for non-resident companies) for “to Case I of Schedule D” substitute “for the purposes of section 35 of CTA 2009 (charge on trade profits)”.

157 Omit section 469(4A) to (5) and (6) (other unit trusts).

158 Omit section 472A (trading profits etc from securities: taxation of amounts taken to reserves).

159 Omit section 473 (conversion etc of securities held as circulating capital).

160 In section 475 (tax-free Treasury securities: exclusion of interest on borrowed money)—

(a) in subsections (1)(b) and (2)(a) for “the Tax Acts” substitute “the Income Tax Acts”,

(b) in subsection (2), omit paragraph (b) and the “and” immediately before it, and

(c) in subsection (4) omit the words from “or to be brought” to the end.

161 In section 477A (building societies: loan relationships), omit subsections (3)(a) and (aa), (4) and (10).

162 Omit section 477B (incidental costs of issuing qualifying shares).

163 (1) Amend section 486 (industrial and provident societies and co-operative associations) as follows.

(2) In subsection (1), omit from the word “but” to the end.

(3) Omit subsections (4) and (7).

(4) Omit subsections (10) and (11).

(5) In subsection (12) omit the definition of “registered industrial and provident society”.

164 Omit section 487 (credit unions).

165 Omit section 491 (distribution of assets of body corporate carrying on mutual business).

166 In section 492(3A) (treatment of oil extraction activities etc for tax purposes) for “section 75” substitute “section 1219 of CTA 2009”.

167 (1) Amend section 494 (loan relationships etc) as follows.

(2) In subsection (1) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”.

(3) In subsection (2)—

(a) for “Chapter II of Part IV of the Finance Act 1996”, in both places where it occurs, substitute “Part 5 of CTA 2009”,

(b) in paragraph (b) for “subsection (4) of section 84” substitute “section 329”, and

(c) in paragraph (c) and in the second sentence for “section 100” substitute “Chapter 2 of Part 6 (relevant non-lending relationships)”.

(4) In subsection (2ZA) for “Chapter 2 of Part 4 of the Finance Act 1996” substitute “Part 5 of CTA 2009”.

(5) In subsection (2A)—

(a) in paragraph (a) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”, and

(b) in the words following paragraph (b) for “section 82(2)” substitute “section 297”.

168 (1) Amend section 494AA (sale and lease-back) as follows.

(2) In subsection (3) for “Schedule D” substitute “Part 3 of CTA 2009”.

(3) In subsection (5)—

(a) in paragraph (a) for “Schedule D” substitute “Part 3 of CTA 2009”, and

(b) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”.

169 In section 494A(1) (computation of amount available for surrender by way of group relief) for “Schedule A losses” substitute “UK property business losses”.

170 (1) Amend section 500 (deduction of PRT in computing income for corporation tax purposes) as follows.

(2) For subsection (3)(b) substitute—

“(b) if that chargeable period ends after the accounting period of the company in or at the end of which the company—

(i) ceases to carry on the trade giving rise to the income referred to above, or

(ii) ceases to be within the charge to corporation tax in respect of that trade,

that accounting period.”

(3) In subsection (6)(d) for the words from “means” to the end substitute “means—

(i) the accounting period in or at the end of which ends the operative chargeable period, or

(ii) if the company ceases to carry on its ring fence trade (or to be within the charge to corporation tax in respect of that trade) before the end of the operative chargeable period, the last accounting period of that trade (or, as the case requires, the accounting period during or at the end of which the company ceased to be within the charge to corporation tax in respect of that trade).”

171 In section 501A(5) (supplementary charge in respect of ring fence trades)—

(a) in paragraph (a) for “Chapter 2 of Part 4 of the Finance Act 1996” and “section 103(1A) and (1B)” substitute “Part 5 of CTA 2009” and “section 475” respectively,

(b) in paragraph (b) for “that Chapter” and “section 103(1A) and (1B)” substitute “that Part” and “section 475” respectively, and

(c) in paragraph (c) for “under Schedule 26 to the Finance Act 2002 (derivative contracts)” substitute “in accordance with Part 7 of CTA 2009 (derivative contracts)”.

172 In section 503(1)(a) (letting of furnished holiday accommodation treated as a trade for certain corporation tax purposes)—

(a) for “Schedule A business” substitute “UK property business”, and

(b) for “trade the profits of which are chargeable to corporation tax under Case I of Schedule D,” substitute “trade carried on wholly or partly in the United Kingdom the profits of which are chargeable to corporation tax under Part 3 of CTA 2009,”.

173 Omit section 504 (meaning of “commercial letting of furnished holiday accommodation”).

174 (1) Amend section 505 (charitable companies: general) as follows.

(2) In subsection (1)(a) for “under Schedules A and D” substitute “under Parts 3 and 4 of CTA 2009”.

(3) In subsection (1)(aa) for “under Schedules A and D” substitute “under Parts 3 and 4 of CTA 2009”.

(4) In subsection (1)(c)—

(a) for sub-paragraph (ii) substitute—

“(ii) from tax under section 299 of CTA 2009 (non-trading profits in respect of loan relationships),

(iiza) from tax under Chapter 5 of Part 10 of that Act (distributions from unauthorised unit trusts),

(iizb) from tax under Chapter 7 of that Part (annual payments not otherwise charged),”,

(b) omit sub-paragraph (iia),

(c) for sub-paragraph (iib) substitute—

“(iib) from tax under Chapter 2 of Part 10 of CTA 2009 (dividends of non-UK resident companies) or from tax under Chapter 8 of that Part (income not otherwise charged) so far as it applies to relevant foreign distributions,”, and

(d) for sub-paragraph (iic) substitute—

“(iic) from tax under Part 8 of CTA 2009 in respect of non-trading gains on intangible fixed assets,”.

(5) In subsection (1)(d) omit “under Schedule D”.

(6) In subsection (1)(e) for “Schedule D” substitute “Part 3 of CTA 2009”.

(7) In subsection (1AA) for the words from “which” to the end substitute “which is not chargeable under Chapter 2 of Part 10 of CTA 2009.”

(8) In subsection (2) for “Case III of Schedule D” substitute “the charge to corporation tax on income”.

175 (1) Amend section 506C (sections 506A and 506B: supplemental) as follows.

(2) In subsection (1) for paragraph (a) substitute—

“(a) section 105 of CTA 2009,”.

(3) In subsection (7)(b)(ii) after “2005” insert “or section 501(2) of CTA 2009”.

176 Omit section 509 (reserves of marketing boards etc).

177 In section 510A(6A) (European Economic Interest Groupings) for “Chapter 2 of Part 4 of the Finance Act 1996” and “section 87A of, and paragraphs 19 and 20 of Schedule 9 to,” substitute “Part 5 of CTA 2009” and “Chapter 9 of that Part and sections 467 and 472 to 474 of” respectively.

178 For section 518(2) (harbour reorganisation schemes) substitute—

“(2) For the purposes of provisions of the Corporation Tax Acts that apply—

(a) only if a person starts to carry on a trade, or

(b) only if a person ceases to carry on a trade,

the transferor is not treated as ceasing to carry on the trade, and the transferee is not treated as starting to carry it on.”

179 Omit section 524 (taxation of receipts from sale of patent rights).

180 Omit section 525 (capital sums: winding up or partnership change).

181 Omit section 526 (relief for expenses).

182 Omit section 528 (manner of making allowances and charges).

183 Omit section 531 (provisions supplementary to section 530).

184 Omit section 532 (application of Capital Allowances Act).

185 Omit section 533 (interpretation of sections 520 to 532).

186 Omit section 556 (activity treated as trade etc and attribution of income).

187 Omit section 558(5) and (6) (visiting performers: supplementary provisions).

188 In section 568(1) (deductions from profits of contributions paid under certified schemes)—

(a) omit “section 74 of this Act or”,

(b) after “section 33 of ITTOIA 2005” insert “or section 53 of CTA 2009 (no deduction for capital expenditure)”, and

(c) for “under Case I of Schedule D or under Part 2 of ITTOIA 2005,” substitute “under Part 2 of ITTOIA 2005 or Part 3 of CTA 2009,”.

189 In section 570(4) (payments under certified schemes which are not repayments of contributions), in the words after paragraph (c), for the words from “section 337(1)” to the end substitute “section 18 of ITTOIA 2005 or section 41 of CTA 2009 (company starting or ceasing to be within charge to corporation tax) is to be treated as effecting a cessation of trading.”

190 (1) Amend section 571 (cancellation of certificates) as follows.

(2) In subsection (1) omit the words from “(in” to “Schedule D)”.

(3) After subsection (1A) insert—

“(1B) So far as relating to corporation tax, the charge to tax under subsection (1) has effect as an application of the charge to corporation tax on income.”

191 Omit section 577 (business entertaining expenses).

192 Omit section 577A (expenditure involving crime).

193 Omit section 578 (housing grants).

194 Omit sections 578A and 578B (expenditure on car hire).

195 Omit sections 579 and 580 (statutory redundancy payments).

196 Omit section 582 (funding bonds issued in respect of interest on certain debts).

197 Omit section 584 (relief for unremittable overseas income).

198 Omit sections 586 and 587 (disallowance of deductions for war risk premiums and of certain payments in respect of war injuries to employees).

199 In section 587B(2)(b) (gifts of shares, securities and real property to charities etc) for “section 83A,” substitute “section 105 of CTA 2009 (gifts of trading stock to charities etc),”.

200 Omit section 588 (training courses for employees).

201 Omit section 589A (counselling services for employees).

202 Omit section 589B(5) (interpretation of section 589A).

203 Omit section 617 (social security benefits and contributions).

204 Omit section 695 (limited interests in residue).

205 Omit section 696 (absolute interests in residue).

206 Omit section 697 (supplementary provisions as to absolute interests in residue).

207 Omit section 698 (special provisions as to certain interests in residue).

208 Omit section 699A (untaxed sums comprised in the income of the estate).

209 In section 700 (adjustments and information)—

(a) omit subsections (1) to (3),

(b) in subsection (4) omit “this Part or”,

(c) in subsection (5)—

(i) omit paragraph (a),

(ii) in paragraph (b) omit “(a) or”, and

(iii) in the words following paragraph (b) omit the words from “deemed” to “this Part or”, in the first place where they occur, and the words “this Part or” in the second place where they occur, and for “(a) to” substitute “(aa) and”, and

(d) after subsection (6) insert—

“(7) This section is to be read as if it were in Chapter 6 of Part 5 of ITTOIA 2005.”

210 Omit section 701 (interpretation).

211 Omit section 702 (application to Scotland).

212 In section 703(3) (cancellation of corporation tax advantage) omit the words from “(the amount” to “accordingly)”.

213 In section 709(2) (meaning of “corporation tax advantage” and other expressions), in the definition of “trading stock”, for “the same meaning as in section 100(1)” substitute “the meaning given by section 163 of CTA 2009”.

214 In section 730(6) (transfers of rights to receive distributions in respect of shares)—

(a) for the words from “, in respect of” to “Schedule D” substitute “be chargeable, under the charge to corporation tax on income, in respect of any distribution which is deemed to be his income by virtue of this section,”, and

(b) for “section 18(3B)” substitute “Chapter 6 of Part 10 of CTA 2009 (sale of foreign dividend coupons)”.

215 In section 736B(2) (deemed manufactured payments in the case of stock lending arrangements) for “section 97 of the Finance Act 1996” substitute “Chapter 9 of Part 6 of CTA 2009”.

216 In section 736C(9) (deemed interest: cash collateral under stock lending arrangements)—

(a) in paragraph (a) for “Chapter 2 of Part 4 of the Finance Act 1996” substitute “Part 5 of CTA 2009”, and

(b) in paragraph (b) for “section 100” to “lending of money)” substitute “Chapter 2 of Part 6 of that Act applies (relevant non-lending relationships)”.

217 In section 747(1B) (controlled foreign companies: company residence for purposes of Chapter), for “section 249 of the Finance Act 1994” substitute “section 18 of CTA 2009”.

218 In section 751(3) (controlled foreign companies: accounting periods) for “subsections (3), (5) and (7) of section 12” substitute “sections 10(1) and (5), 11(1) and (2) and 12 of CTA 2009”.

219 (1) Amend section 755A (treatment of chargeable profits and creditable tax apportioned to company carrying on life assurance business) as follows.

(2) In subsection (5) for “Case I of Schedule D” substitute “section 35 of CTA 2009 (charge on trade profits)”.

(3) In subsection (7) for “Case I of Schedule D” substitute “section 35 of CTA 2009”.

(4) In subsection (11BA)—

(a) for “Case I profits”, in both places where it occurs, substitute “section 35 profits”, and

(b) for “provisions applicable to Case I of Schedule D” substitute “life assurance trade profits provisions”.

220 (1) Amend section 761 (charge to income tax or corporation tax of offshore income gain) as follows.

(2) In subsection (1)(b)(ii) for “as a profit or gain under Case VI of Schedule D” substitute “, under the charge to corporation tax on income,”.

(3) In subsection (2) for “section 11(2A)(c)” substitute “section 19(3)(c) of CTA 2009”.

221 (1) Amend section 768B (change in ownership of company with investment business: deductions generally) as follows.

(2) In subsection (6) for “section 75” substitute “Chapter 2 of Part 16 of CTA 2009 (companies with investment business) as”.

(3) In subsection (7) for “sections 338 and 75” substitute “section 338 above (charges on income deducted from total profits) and Chapter 2 of Part 16 of CTA 2009”.

(4) In subsection (8) for “section 75(7)” substitute “section 1233 of CTA 2009 (companies with investment business: excess capital allowances)”.

(5) In subsection (9) for “section 75” substitute “section 1219 of CTA 2009 (expenses of management of a company’s investment business)”.

(6) In subsection (10)—

(a) omit “and non-trading deficits”,

(b) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”,

(c) for “paragraph 14(3) of Schedule 26 to the Finance Act 2002” substitute “section 574 of that Act”, and

(d) at the end insert “and the non-trading deficits in respect of those relationships that may be carried forward”.

(7) In subsection (13)—

(a) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”, and

(b) for “paragraph 14(3) of Schedule 26 to the Finance Act 2002” substitute “section 574 of that Act”.

(8) In subsection (14) for “same meaning as in Part IV” substitute “meaning given by section 1218 of CTA 2009”.

222 (1) Amend section 768C (deductions: asset transferred within group) as follows.

(2) In subsection (7) for “section 75” substitute “section 1219 of CTA 2009 (expenses of management of a company’s investment business)”.

(3) In subsection (9)—

(a) omit “and non-trading deficits”,

(b) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”,

(c) for “paragraph 14(3) of Schedule 26 to the Finance Act 2002” substitute “section 574 of that Act”, and

(d) at the end insert “and the non-trading deficits in respect of those relationships that may be carried forward”.

(4) In subsection (12) for “same meaning as in Part 4” substitute “meaning given by section 1218 of CTA 2009”.

(5) In subsection (13)—

(a) for “Schedule 29 to the Finance Act 2002” substitute “Part 8 of CTA 2009”,

(b) in paragraph (a) for “paragraph 55 of that Schedule” substitute “section 775 of CTA 2009”,

(c) in paragraph (b) for “that Act”, “that Schedule”, in the first place where it occurs, and “a credit within paragraph 34(1)(a) of that Schedule (non-trading credits)” substitute “the 1992 Act”, “that Part” and “a non-trading credit for the purposes of that Part (see section 746 of that Act)” respectively,

(d) in paragraph (c) for “that Schedule” substitute “that Part (see section 734(1) of that Act)”, and

(e) in paragraph (d) for “Part 6 of that Schedule” substitute “Chapter 6 of that Part”.

223 (1) Amend section 768D (change in ownership of company carrying on property business) as follows.

(2) In subsection (1) for “Schedule A business” substitute “UK property business”.

(3) In subsection (2) for “Schedule A loss” substitute “UK property business loss”.

(4) In subsection (8)—

(a) in paragraph (a) for “Schedule A business” substitute “UK property business”, and

(b) in paragraph (b) for “same meaning as in Part 4” substitute “meaning given by section 1218 of CTA 2009”.

(5) In subsection (9) for “Schedule A business” substitute “UK property business”.

224 (1) Amend section 768E (change in ownership of company with unused non-trading loss on intangible fixed assets) as follows.

(2) In subsections (1) and (4) for “paragraph 35 of Schedule 29 to the Finance Act 2002” substitute “section 753 of CTA 2009 (treatment of non-trading losses)”.

(3) In subsection (5) for “paragraph 35(3) of Schedule 29 to the Finance Act 2002” substitute “section 753(3) of CTA 2009 (carry forward of non-trading losses)”.

(4) In subsection (7) for “same meaning as in Part 4” substitute “meaning given by section 1218 of CTA 2009”.

225 In section 774(1) (transactions between dealing company and associated company) for “Case VI of Schedule D” substitute “the charge to corporation tax on income”.

226 In section 774B(5) (disregard of intended effects of arrangement involving disposal of assets)—

(a) in paragraph (a) for “Chapter 2 of Part 4 of the Finance Act 1996” substitute “Part 5 of CTA 2009”, and

(b) in paragraph (b) for “that Chapter” substitute “that Part”.

227 (1) Amend section 774D (disregard of intended effects of arrangement involving change in relation to a partnership) as follows.

(2) In subsection (4) for “section 114 above” substitute “sections 1259 to 1265 of CTA 2009”.

(3) In subsections (7)(a) and (10)(a), for “paragraph 19 of Schedule 9 to the Finance Act 1996 (and the other provisions of Chapter 2 of Part 4 of that Act)” substitute “Chapter 9 of Part 5 of CTA 2009 (partnerships involving companies) (and the other provisions of that Part)”.

228 In section 774E (sections 774B and 774D: exceptions)—

(a) in the first sentence of subsection (3), in paragraph (a) for “Chapter 2 of Part 4 of the Finance Act 1996” substitute “Part 5 of CTA 2009”,

(b) in the second sentence of subsection (3) for “section 100” to “money)” substitute “Chapter 2 of Part 6 of CTA 2009 (relevant non-lending relationships)”,

(c) in subsection (4)(b) after “securities)” insert “or Chapter 10 of Part 6 of CTA 2009 (repos)”, and

(d) in subsection (4)(c) after “2005” insert “or Chapter 6 of Part 6 of CTA 2009”.

229 In section 774G(7) (sections 774A to 774D: minor definitions etc) for “section 34 above” substitute “sections 217 to 221 of CTA 2009”.

230 (1) Amend section 775A (transfers of rights to receive annual payments) as follows.

(2) In subsection (1), for “(4)” substitute “(2)”.

(3) For subsections (2) to (4) substitute—

“(2) This section applies to any annual payment other than—

(a) an annual payment under a life annuity;

(b) an annual payment under a pension annuity;

(c) an annual payment to which section 347A applies (certain annual payments not to form part of the income of a company for corporation tax purposes);

(d) an annual payment in respect of which, by virtue of section 727 of ITTOIA 2005 (payments by individuals arising in UK), no liability to income tax arises under Part 5 of that Act.

(3) Where this section applies, the person who sells or transfers the right to the annual payment shall be charged to tax for the chargeable period in which the sale or transfer takes place on an amount equal to the market value of the right to receive the annual payment.

(4) So far as relating to corporation tax, the charge to tax under subsection (3) has effect as an application of the charge to corporation tax on income.”

231 (1) Amend section 776 (transactions in land: taxation of capital gains) as follows.

(2) For subsections (3) and (3A) substitute—

“(3) Where this section applies, then, subject to the following provisions of this section, the company by which any such gain is realised shall be chargeable to corporation tax, for the accounting period in which the gain is realised, on the whole of the gain.

(3A) The charge under subsection (3) has effect as an application of the charge to corporation tax on income.”

(3) In subsection (6)—

(a) in paragraph (a) for “Case I of Schedule D” substitute “Part 3 of CTA 2009”, and

(b) in paragraph (b) for “subsections (2) and (3) of section 99 above” substitute “section 136 of CTA 2009”.

(4) In subsection (7) for “Case I of Schedule D” substitute “Part 3 of CTA 2009”.

(5) In subsection (8) for “(3)(b)” substitute “(3)”.

232 (1) Amend section 779 (sale and lease-back: limitation on tax reliefs) as follows.

(2) For subsection (10) substitute—

“(10) In this section references to rent under a lease include references to expenses which the tenant under the lease is treated as incurring in respect of the land subject to the lease under—

(a) sections 61 to 67 or 292 to 297 of ITTOIA 2005, or

(b) sections 63 to 67 or 232 to 234 of CTA 2009,

and such expenses are treated for the purposes of this section as having been paid as soon as they have been incurred.”

(3) In subsection (13)—

(a) omit paragraph (a),

(b) in paragraph (c) for “profits or gains chargeable under Case VI of Schedule D” substitute “profits or gains chargeable to corporation tax under or by virtue of any provision to which section 834A (miscellaneous charges) applies”,

(c) in paragraph (d) leave out “75 or”, and

(d) after paragraph (d) insert—

“(da) a deduction under section 1219 of CTA 2009 (expenses of management of a company’s investment business);”.

233 In section 780(3A) (sale and lease-back: taxation of consideration received) for “as a profit or gain under Case VI of Schedule D” substitute “under the charge to corporation tax on income”.

234 (1) Amend section 781 (assets leased to traders and others) as follows.

(2) In subsection (1) omit the words from “(in” to “Schedule D)”.

(3) After subsection (1A) insert—

“(1B) So far as relating to corporation tax, the charge to tax under subsection (1) has effect as an application of the charge to corporation tax on income.”

(4) In subsection (4)—

(a) in paragraph (b) for “profits or gains chargeable under Case VI of Schedule D” substitute “profits or gains chargeable to corporation tax under or by virtue of any provision to which section 834A (miscellaneous charges) applies”,

(b) in paragraph (c) leave out “75 or”, and

(c) after paragraph (c) insert—

“(ca) a deduction under section 1219 of CTA 2009 (expenses of management of a company’s investment business);”.

235 In section 782(9) (leased assets: special cases) omit the words from “, and where” to the end.

236 In section 785 (definitions for purposes of sections 781 to 784), in the definition of “capital sum” for “under Case VI of Schedule D” substitute “under or by virtue of any provision to which section 834A (miscellaneous charges) applies”.

237 In section 785ZA(3) (restrictions on use of losses: leasing partnerships) for “section 114(2)” substitute “sections 1262 to 1264 of CTA 2009”.

238 In section 785ZB(8) (section 785ZA: definitions)—

(a) in paragraph (a) for “(Schedule A losses)” substitute “(UK property business losses)”, and

(b) in paragraph (d) for “(Case VI losses)” substitute “(losses from miscellaneous transactions)”.

239 In section 785C(4)(a) (section 785B: interpretation) for “under Schedule A” substitute “under Chapter 3 of Part 4 of CTA 2009 as profits of a UK property business”.

240 In section 785D(3) (section 785B: lease of plant and machinery and other property) for “under Schedule A” substitute “under Chapter 3 of Part 4 of CTA 2009 as profits of a UK property business”.

241 (1) Amend section 786 (transactions associated with loans or credit) as follows.

(2) In subsection (3A)(b) for “chargeable to corporation tax under Case III of Schedule D” substitute “which is from a source in the United Kingdom and chargeable to corporation tax under Chapter 5 of Part 10 of CTA 2009 (distributions from unauthorised unit trusts) or Chapter 7 of that Part (annual payments not otherwise charged).”

(3) In subsection (5)(b) for “Case VI of Schedule D” substitute “the charge to corporation tax on income”.

242 (1) Amend section 787 (restriction of relief for payments of interest) as follows.

(2) In subsection (1) for “Tax Acts” substitute “Income Tax Acts”.

(3) Omit subsection (1A).

(4) In subsection (2) omit “or total profits”.

(5) Omit subsection (3).

243 In section 788(7) (relief by agreement with other territories) omit the words from “, and, in” to the end.

244 In section 790(11) (unilateral relief) omit the words from “, and, in” to the end.

245 In section 795(4) (computation of income subject to foreign tax)—

(a) in paragraph (a) for “section 80(5) of the Finance Act 1996” and “Chapter II of Part 4” substitute “section 464(1) of CTA 2009” and “Part 5” respectively, and

(b) in paragraph (b) for “paragraph 1(3) of Schedule 29 to the Finance Act 2002” and “that Schedule” substitute “section 906(1) of CTA 2009” and “Part 8 of that Act” respectively.

246 (1) Amend section 797 (limits on credit: corporation tax) as follows.

(2) In subsection (2A) for the words from “section 11AA” to “under that section” substitute “Chapter 4 of Part 2 of CTA 2009 (profits attributable to permanent establishment), and of any regulations made under section 24 of that Act”.

(3) In subsection (3A) for the words from “to which” to “relates,” substitute—

“(a) which falls to be set off under section 388(1) of CTA 2009 (insurance companies: basic rule: deficit set off against income and gains of deficit period), or

(b) to which a claim under section 459(1)(a) of that Act (claim to set off deficit against profits of deficit period) relates,”.

(4) In subsection (3B)(b) for “subsection (3A) of section 83 of the Finance Act 1996” substitute “section 457(1) of CTA 2009”.

(5) In subsection (6) for “paragraph 4 of Schedule 8 to the Finance Act 1996” substitute “Chapter 16 of Part 5 of CTA 2009 (see section 457(5) of that Act)”.

247 (1) Amend section 797A (foreign tax on items giving rise to a non-trading credit: loan relationships) as follows.

(2) In subsection (1)(a) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”.

(3) In subsection (2)—

(a) for “paragraph (a) of Case III of Schedule D” substitute “section 299 of CTA 2009”, and

(b) omit “and gains”.

(4) In subsection (4) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”.

(5) In subsection (5)—

(a) in paragraph (a) for “subsection (2)(c)” to “that Act” substitute “section 389(1) or 459(1)(b) of CTA 2009”, and

(b) in paragraph (b) for “subsection (3A)” to “that Schedule” substitute “section 391 or 457(1) of CTA 2009”.

(6) In subsection (6) for “section 83(3A) of that Act” substitute “section 457(1) of CTA 2009”.

(7) In subsection (7)(c) for the words from “in pursuance” to the end of sub-paragraph (ii) substitute “as the result of—

(i) the application of section 388(1) of CTA 2009 (insurance companies: basic rule: deficit set off against income and gains of deficit period), or

(ii) a claim under section 459(1)(a) of that Act (claim to set off deficit against profits of deficit period),”.

(8) In subsection (8) for “paragraph 4 of Schedule 8 to the Finance Act 1996” substitute “Chapter 16 of Part 5 of CTA 2009 (see section 457(5) of that Act)”.

248 In section 797B (foreign items giving rise to a non-trading credit: intangible fixed assets)—

(a) in subsection (1)(a) for “Schedule 29 to the Finance Act 2002” substitute “Part 8 of CTA 2009”,

(b) in subsection (2) for “Case VI of Schedule D” substitute “that Part of that Act”, and

(c) in subsection (4) for “Schedule 29 to the Finance Act 2002” and “paragraph 35(3) of that Schedule” substitute “Part 8 of CTA 2009” and “section 753(3) of that Act” respectively.

249 (1) Amend section 798A (section 797: trade income) as follows.

(2) In subsection (4) for paragraphs (a) to (d) substitute—

“(a) income chargeable to tax under Chapter 2 or 15 of Part 3 of CTA 2009 (trade profits and post-cessation receipts),

(b) income chargeable to tax under Chapter 3 or 9 of Part 4 of CTA 2009 (profits of property businesses and post-cessation receipts),

(c) income which arises from a source outside the United Kingdom and is chargeable to tax under section 979 of CTA 2009 (charge to tax on income not otherwise charged), and

(d) any other income or profits which by a provision of this Act is or are—

(i) chargeable to tax under Chapter 2 of Part 3 of CTA 2009, or

(ii) calculated in the same way as the profits of a trade;”.

(3) After subsection (4) insert—

“(5) In subsection (4) the references—

(a) to income chargeable under Chapter 15 of Part 3 of CTA 2009, and

(b) to income chargeable under Chapter 9 of Part 4 of CTA 2009,

do not include income that would, but for the repeal by CTA 2009 of section 103 above, have been chargeable to corporation tax under that section.”

250 In section 804A(1) (life assurance companies with overseas branches etc: restriction of credit)—

(a) for “Case I or VI of Schedule D” substitute “section 35 of CTA 2009 (charge on trade profits) or section 436A”, and

(b) for “to Case I of Schedule D” substitute “for the purposes of section 35 of CTA 2009”.

251 (1) Amend section 804C (insurance companies: allocation of expenses etc in computations under Case I of Schedule D) as follows.

(2) In subsection (1)(b) for “to Case I of Schedule D” substitute “for the purposes of section 35 of CTA 2009 (charge on trade profits)”.

(3) In the heading for “Case I of Schedule D” substitute “section 35 of CTA 2009”.

252 In section 806A(2) (eligible unrelieved foreign tax on dividends: introductory) for “chargeable under Case V of Schedule D” substitute “which are chargeable under Chapter 2 of Part 10 of CTA 2009 (dividends of non-UK resident companies), or which would be so chargeable but for section 982 of that Act (priority rules)”.

253 (1) Amend section 806B (amounts that are eligible unrelieved foreign tax) as follows.

(2) In subsections (3), (4) and (5) for “Case V dividend” substitute “dividend falling within section 806A(2)”.

(3) In subsection (10)—

(a) omit the definition of “the Case V dividend”,

(b) for paragraph (b) of the definition of “higher level dividend” substitute—

“(b) which either is the dividend falling within section 806A(2) or is to any extent represented by that dividend;”, and

(c) in paragraph (a) of the definition of “the relevant tax” for “Case V dividend” substitute “dividend falling within section 806A(2)”.

254 In section 806K(2)(bb) (application of foreign dividend provisions to branches or agencies in the UK of persons resident elsewhere) for the words from “take” to “under”, in the second place where it occurs, substitute “for the words in section 806A(2) from “Chapter 2” to “rules)” substitute”.

255 In section 806L(5) (carry forward or carry back of unrelieved foreign tax)—

(a) for paragraph (a) and the “or” immediately after it substitute—

“(a) profits, chargeable under Chapter 2 of Part 3 of CTA 2009, of a trade carried on partly, but not wholly, outside the United Kingdom; or”, and

(b) in paragraph (b) omit “Case VI of Schedule D by virtue of”.

256 (1) Amend section 807A (disposals and acquisitions of company loan relationships with or without interest) as follows.

(2) In subsection (2B) for “section 91A” to “relationships)” substitute “section 523 of CTA 2009 (application of Part 5 of that Act to certain shares as rights under creditor relationship)”.

(3) In subsection (6A) (as substituted by paragraph 10 of Schedule 14 to FA 2007) in paragraph (a) for “paragraph 2 of Schedule 13 to the Finance Act 2007” substitute “Chapter 10 of Part 6 of CTA 2009 (see section 548 of that Act)”.

257 After section 807A insert—

“European cross-border transfers of business

807B Introduction to section 807C

(1) Subject to subsections (4) to (6), section 807C applies if condition A or B is met.

(2) Condition A is that—

(a) a company resident in the United Kingdom transfers to a company resident in another member State the whole or part of a business which immediately before the transfer the transferor carried on in a member State other than the United Kingdom through a permanent establishment, and

(b) the transfer includes—

(i) the transfer of an asset or liability representing a loan relationship,

(ii) the transfer of rights and liabilities under a derivative contract, or

(iii) the transfer of intangible fixed assets that are chargeable intangible assets in relation to the transferor immediately before the transfer and in the case of one or more of which the proceeds of realisation exceed the costs recognised for tax purposes.

(3) Condition B is that—

(a) a company resident in the United Kingdom transfers part of its business to one or more companies,

(b) the part of the transferor’s business which is transferred was carried on immediately before the transfer in a member State other than the United Kingdom through a permanent establishment,

(c) at least one transferee is resident in a member State other than the United Kingdom,

(d) the transferor continues to carry on a business after the transfer,

(e) the condition in subsection (2)(b) is met, and

(f) the transfer—

(i) is made in exchange for the issue of shares in or debentures of each transferee to each person holding shares in or debentures of the transferor, or

(ii) is not so made only because, and only so far as, a transferee is prevented from so issuing such shares or debentures by section 658 of the Companies Act 2006 (general rule against limited company acquiring own shares) or by a corresponding provision of the law of another member State preventing such an issue.

(4) If a transfer that meets condition A or B includes such a transfer as is mentioned in subsection (2)(b)(i), section 807C —

(a) only applies as respects the transfer so mentioned as a result of the transfer meeting condition A if the transfer is wholly or partly in exchange for shares or debentures issued by the transferee to the transferor, and

(b) only applies as respects the transfer so mentioned as a result of the transfer meeting condition B if each transferee is resident in a member State, but not necessarily the same one.

(5) If a transfer that meets condition A or B includes such a transfer as is mentioned in subsection (2)(b)(ii), section 807C—

(a) only applies as respects the transfer so mentioned as a result of the transfer meeting condition A if the transfer is wholly or partly in exchange for shares or debentures issued by the transferee to the transferor or to the persons holding shares in or debentures of the transferor,

(b) only applies as respects the transfer so mentioned as a result of the transfer meeting condition B if each transferee is resident in a member State, but not necessarily the same one, and

(c) only applies as respects the transfer so mentioned if the transferor makes a claim under this section in respect of it.

(6) If a transfer that meets condition A or B includes such a transfer as is mentioned in subsection (2)(b)(iii), section 807C—

(a) only applies as respects the transfer so mentioned as a result of the transfer meeting condition A if—

(i) the companies mentioned in subsection (2)(a) are companies incorporated under the law of a member State, and

(ii) the transfer is wholly or partly in exchange for shares or other securities issued by the transferee to the transferor,

(b) only applies as respects the transfer so mentioned as a result of the transfer meeting condition B if—

(i) the transferor and at least one of the transferees mentioned in subsection (3)(a) is a company so incorporated, and

(ii) the transfer is in exchange for shares or debentures issued by the transferee to the persons holding shares in or debentures of the transferor, and

(c) only applies as respects the transfer so mentioned if—

(i) the transfer includes the whole of the assets of the transferor used for the purposes of the business or part, or the whole of those assets other than cash, and

(ii) the transferor makes a claim under this section in respect of the transfer so mentioned.

(7) No claim may be made under subsection (6) in respect of a transfer in relation to which a claim is made under section 827 of CTA 2009 (claims to postpone charge on transfer of assets to non-UK resident company).

(8) For the purposes of this section, a company is resident in a member State if—

(a) it is within a charge to tax under the law of the State as being resident for that purpose, and

(b) it is not regarded, for the purpose of any double taxation relief arrangements to which the State is a party, as resident in a territory not within a member State.

(9) In this section and section 807C—

• “company” means any entity listed as a company in the Annex to the Mergers Directive,

• “derivative contract” has the same meaning as in Part 7 of CTA 2009,

• “intangible fixed assets” and “chargeable intangible assets”, in relation to any person, have the same meaning as in Part 8 of CTA 2009,

• “loan relationship” has the same meaning as in Part 5 of CTA 2009,

• “the Mergers Directive” means Council Directive No. 90/434/EEC of 23 July 1990 on mergers, transfers etc,

• “proceeds of realisation”, in relation to intangible fixed assets, has the meaning given in section 739 of CTA 2009, and

• “recognised for tax purposes” has the same meaning as in Part 8 of CTA 2009.”

258 After section 807B insert—

“807C Tax treated as chargeable in respect of transfer of loan relationship, derivative contract or intangible fixed assets

(1) If tax would have been chargeable under the law of one or more other member States in respect of the transfer mentioned in section 807B(2)(b)(i), (ii) or (iii) but for the Mergers Directive, this Part, including any arrangements having effect by virtue of section 788, is to apply as if that tax had been chargeable.

(2) In calculating tax notionally chargeable under subsection (1), it is to be assumed—

(a) that to the extent permitted by the law of the other member State losses arising on the transfer mentioned in section 807B(2)(b)(i), (ii) or (iii) are set against gains arising on that transfer, and

(b) that any relief due to the transferor under that law is claimed.

(3) Subsection (1) does not apply if—

(a) the transfer of business mentioned in section 807B(2)(a) or (3)(a) is not effected for genuine commercial reasons, or

(b) that transfer of business forms part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoiding liability to corporation tax, capital gains tax or income tax.

(4) But subsection (3) does not prevent subsection (1) from applying if before the transfer—

(a) the appropriate applicant has applied to the Commissioners for Her Majesty’s Revenue and Customs, and

(b) the Commissioners have notified the appropriate applicant that they are satisfied subsection (3) will not have that effect.

(5) In subsection (4) “the appropriate applicant” means—

(a) in a case where tax chargeable in respect of such a transfer as is mentioned in section 807B(2)(b)(i) or (ii) is concerned, the companies mentioned in section 807B(2)(a) or (3)(a), and

(b) in a case where tax chargeable in respect of such a transfer as is mentioned in section 807B(2)(b)(iii) is concerned, the transferor.

(6) Sections 427 and 428 of CTA 2009 (procedure and decisions on applications for clearance) have effect in relation to subsection (4) as in relation to section 426(2) of that Act, taking the references in section 428 to section 426(2)(b) as references to subsection (4)(b) of this section.”

259 After section 807C insert—

“European cross-border mergers

807D Introduction to section 807E

(1) Section 807E applies if—

(a) conditions A to E,

(b) in the case of a merger within subsection (2)(a), (b) or (c), condition F, and

(c) in the case of a merger within subsection (2)(c) or (d), condition G.

are met.

(2) Condition A is that—

(a) an SE is formed by the merger of two or more companies in accordance with Articles 2(1) and 17(2)(a) or (b) of Council Regulation (EC) No. 2157/2001 on the Statute for a European company (Societas Europaea),

(b) an SCE is formed by the merger of two or more co-operative societies, at least one of which is a society registered under the Industrial and Provident Societies Act 1965, in accordance with Articles 2(1) and 19 of Council Regulation (EC) No. 1435/2003 on the Statute for a European Co-operative Society (SCE),

(c) a merger is effected by the transfer by one or more companies of all their assets and liabilities to a single existing company, or

(d) a merger is effected by the transfer by two or more companies of all their assets and liabilities to a single new company (other than an SE or an SCE) in exchange for the issue by the transferee, to each person holding shares in or debentures of a transferor, of shares or debentures.

(3) Condition B is that each merging company is resident in a member State.

(4) Condition C is that the merging companies are not all resident in the same State.

(5) Condition D is that in the course of the merger a company resident in the United Kingdom (“company A”) transfers to a company resident in another member State all assets and liabilities relating to a business which company A carried on in a member State other than the United Kingdom through a permanent establishment (but see subsection (9)).

(6) Condition E is that the transfer mentioned in subsection (5) includes—

(a) the transfer of an asset or liability representing a loan relationship,

(b) the transfer of rights and liabilities under a derivative contract, or

(c) the transfer of intangible fixed assets—

(i) that are chargeable intangible assets in relation to company A immediately before the transfer, and

(ii) in the case of one or more of which the proceeds of realisation exceed the cost recognised for tax purposes.

(7) Condition F is that—

(a) the transfer of assets and liabilities to the transferee in the course of the merger is made in exchange for the issue of shares or debentures by the transferee to each person holding shares in or debentures of a transferor, or

(b) paragraph (a) is not met in relation to the transfer of those assets and liabilities only because, and only so far as, the transferee is prevented from so issuing such shares or debentures by section 658 of the Companies Act 2006 (general rule against limited company acquiring own shares) or by a corresponding provision of the law of another member State preventing such an issue.

(8) Condition G is that in the course of the merger each transferor ceases to exist without being in liquidation (within the meaning given by section 247 of the Insolvency Act 1986).

(9) In the case of a merger within subsection (2)(a) or (b), in determining whether section 807E applies in respect of such a transfer as is mentioned in subsection (6)(c), condition D is regarded as met even if all liabilities relating to the business which company A carried on are not transferred as mentioned in subsection (5).

(10) For the purposes of this section, a company is resident in a member State if—

(a) it is within a charge to tax under the law of the State as being resident for that purpose, and

(b) it is not regarded, for the purpose of any double taxation relief arrangements to which the State is a party, as resident in a territory not within a member State.

(11) In this section and section 807E—

• “company” means any entity listed as a company in the Annex to the Mergers Directive,

• “co-operative society” means a society registered under the Industrial and Provident Societies Act 1965 or a similar society governed by the law of a member State other than the United Kingdom,

• “derivative contract” has the same meaning as in Part 7 of CTA 2009,

• “intangible fixed assets” and “chargeable intangible assets”, in relation to any person, have the same meaning as in Part 8 of CTA 2009,

• “loan relationship” has the same meaning as in Part 5 of CTA 2009,

• “the Mergers Directive” means Council Directive No. 90/434/EEC of 23 July 1990 on mergers, transfers etc,

• “proceeds of realisation”, in relation to intangible fixed assets, has the meaning given in section 739 of CTA 2009,

• “recognised for tax purposes” has the same meaning as in Part 8 of CTA 2009,

• “SE” and “SCE” have the same meaning as in CTA 2009 (see section 1319 of that Act)),

• “the transferee” means—

  (a)

  in relation to a merger within subsection (2)(a), the SE,

  (b)

  in relation to a merger within subsection (2)(b), the SCE,

  (c)

  in relation to a merger within subsection (2)(c) or (d), the company to which assets and liabilities are transferred, and

• “transferor” means—

  (a)

  in relation to a merger within subsection (2)(a), a company merging to form the SE,

  (b)

  in relation to a merger within subsection (2)(b), a co-operative society merging to form the SCE, and

  (c)

  in relation to a merger within subsection (2)(c) or (d), a company transferring all of its assets and liabilities.

(12) In section 807E, “company A”, “the merger” and “the merging companies” have the same meaning as in this section.”

260 After section 807D insert—

“807E Tax treated as chargeable in respect of transfer of loan relationship, derivative contract or intangible fixed assets

(1) If tax would have been chargeable under the law of one or more other member States in respect of the transfer mentioned in section 807D(6)(a), (b) or (c) but for the Mergers Directive, this Part, including any arrangements having effect by virtue of section 788, is to apply as if that tax had been chargeable.

(2) In calculating tax notionally chargeable under subsection (1) in respect of the transfer mentioned in section 807D(6)(a) or (b), it is to be assumed—

(a) that to the extent permitted by the law of the other member State losses arising on that transfer are set against gains arising on that transfer, and

(b) that any relief due to company A under that law is claimed.

(3) Subsection (1) does not apply if—

(a) the merger is not effected for genuine commercial reasons, or

(b) the merger forms part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoiding liability to corporation tax, capital gains tax or income tax.

(4) But subsection (3) does not prevent subsection (1) from applying if before the merger—

(a) any of the merging companies has applied to the Commissioners for Her Majesty’s Revenue and Customs, and

(b) the Commissioners have notified the merging companies that they are satisfied subsection (3) will not have that effect.

(5) Sections 427 and 428 of CTA 2009 (procedure and decisions on applications for clearance) have effect in relation to subsection (4) as in relation to section 426(2) of that Act, taking the references in section 428 to section 426(2)(b) as references to subsection (4)(b) of this section.”

261 After section 807E insert—

“Transparent entities involved in cross-border transfers and mergers

807F Introduction to section 807G

(1) Section 807G applies if, as a result of—

(a) a relevant loan relationship transaction,

(b) a relevant derivative contracts transaction, or

(c) a relevant intangible fixed assets transaction,

tax would have been chargeable under the law of a member State other than the United Kingdom in respect of a relevant profit but for the Mergers Directive.

(2) In this section “relevant loan relationship transaction” means—

(a) a transfer of a kind which meets condition A or B in section 421 of CTA 2009 or would meet one of those conditions if—

(i) the business or part of the business transferred were carried on by the transferor in the United Kingdom, and

(ii) the condition in section 421(3)(c) or (4)(f) of that Act were met,

and in relation to which the transferor or transferee or one of the transferees is a transparent entity, or

(b) a merger of a kind mentioned in section 431(2) of that Act which meets—

(i) conditions B to D in section 431,

(ii) in the case of a merger within section 431(3)(a), (b) or (c), condition E in section 431, and

(iii) in the case of a merger within section 431(3)(c) or (d), condition F in section 431,

and in relation to which one or more of the merging companies is a transparent entity.

(3) In this section “relevant derivative contracts transaction” means—

(a) a transfer of a kind which meets condition A or B in section 674 of CTA 2009 or would meet one of those conditions if—

(i) the business or part of the business transferred were carried on by the transferor in the United Kingdom, and

(ii) the condition in section 674(2)(c) or (3)(f) of that Act were met,

and in relation to which the transferor is a transparent entity, or

(b) a merger of a kind mentioned in section 682(2) of that Act which meets—

(i) conditions B to D in section 682,

(ii) in the case of a merger within section 682(2)(a), (b) or (c), condition E in section 682, and

(iii) in the case of a merger within section 682(2)(c) or (d), condition F in section 682,

and in relation to which one or more of the merging companies is a transparent entity.

(4) In this section “relevant intangible fixed assets transaction” means—

(a) a transfer—

(i) which is of a kind which meets condition A or B in section 819 of CTA 2009, or would meet one of those conditions if the business or part of the business transferred were carried on by the transferor in the United Kingdom, and

(ii) in relation to which the transferor or transferee or one of the transferees is a transparent entity, or

(b) a merger—

(i) which is of a kind mentioned in section 821(2) of that Act,

(ii) which meets conditions B and C in section 821,

(iii) which, if it is a merger within section 821(2)(a), (b) or (c), meets condition D in section 821,

(iv) which, if it is a merger within section 821(2)(c) or (d), meets condition E in section 821,

(v) in the course of which no qualifying assets are transferred to which section 818 (company reconstruction involving transfer of business) applies, and

(vi) in relation to which one or more of the merging companies is a transparent entity.

(5) In this section “relevant profit” means—

(a) in the case of a transfer within subsection (2)(a), a profit accruing to a transparent entity in respect of a loan relationship (or which would be treated as accruing if it were not transparent) because of the transfer of assets or liabilities representing a loan relationship by the transparent entity to the transferee,

(b) in the case of a merger within subsection (2)(b), a profit accruing to a transparent entity in respect of a loan relationship (or which would be treated as accruing if it were not transparent) because of the transfer of assets or liabilities representing a loan relationship by the transparent entity to another company in the course of the merger,

(c) in the case of a transfer within subsection (3)(a), a profit accruing to a transparent entity in respect of a derivative contract (or which would be treated as accruing if it were not transparent) because of the transfer of rights and liabilities under the derivative contract by the transparent entity to the transferee,

(d) in the case of a merger within subsection (3)(b), a profit accruing to a transparent entity in respect of a derivative contract (or which would be treated as accruing if it were not transparent) because of the transfer of rights and liabilities under the derivative contract by the transparent entity to another company in the course of the merger,

(e) in the case of a transfer within subsection (4)(a), a profit which would be treated as accruing to a transparent entity in respect of an intangible fixed asset, because of the transfer of intangible fixed assets by the transparent entity, if it were not transparent,

(f) in the case of a merger within subsection (4)(b), a profit which would be treated as accruing to a transparent entity in respect of an intangible fixed asset, because of the transfer of intangible fixed assets by the transparent entity in the course of the merger, if it were not transparent.

(6) In this section and section 807G—

• “company” means any entity listed as a company in the Annex to the Mergers Directive,

• “derivative contract” has the same meaning as in Part 7 of CTA 2009,

• “intangible fixed assets” has the same meaning as in Part 8 of CTA 2009,

• “loan relationship” has the same meaning as in Part 5 of CTA 2009,

• “the Mergers Directive” means Council Directive No. 90/434/EEC of 23 July 1990 on mergers, transfers etc, and

• “transparent entity” means a company which is resident in a member State other than the United Kingdom and does not have an ordinary share capital.”

262 After section 807F insert—

“807G Tax treated as chargeable in respect of relevant transactions

(1) This Part, including any arrangements having effect by virtue of section 788, is to apply as if the tax that would have been chargeable as mentioned in section 807F(1) had been chargeable.

(2) In calculating tax notionally chargeable under subsection (1), it is assumed—

(a) that to the extent permitted by the law of the other member State mentioned in section 807F(1) losses arising on the relevant transfer are set against profits arising on it, and

(b) that any relief available under that law is claimed.

(3) In this section “the relevant transfer” means—

(a) the transfer of assets or liabilities mentioned in paragraph (a) or (b) of section 807F(5),

(b) the transfer of rights and liabilities mentioned in paragraph (c) or (d) of that section, or

(c) the transfer of intangible fixed assets mentioned in paragraph (e) or (f) of that section.”

263 In section 811(3) (deduction for foreign tax where no credit allowable)—

(a) in paragraph (a) for “section 80(5) of the Finance Act 1996” and “Chapter II of Part IV” substitute “section 464(1) of CTA 2009” and “Part 5” respectively, and

(b) in paragraph (b) for “paragraph 1(3) of Schedule 29 to the Finance Act 2002” and “that Schedule” substitute “section 906(1) of CTA 2009” and “Part 8 of that Act” respectively.

264 In section 815AZA (UK residents and foreign enterprises) for subsection (4) substitute—

“(4) This section does not apply in relation to—

(a) income of a person resident in the United Kingdom to which section 858 of ITTOIA 2005 applies, or

(b) income of a company resident in the United Kingdom to which section 1266 of CTA 2009 applies.”

265 Omit section 817 (deductions not to be allowed in computing profits or gains).

266 In section 821(1)(a) (under-deductions from payments made before passing of annual Act) omit “under under Case III of Schedule D”.

267 (1) Amend section 826 (interest on tax overpaid) as follows.

(2) In subsection (1)—

(a) in paragraph (d) for “Schedule 20 to the Finance Act 2000” substitute “Chapter 2 or 7 of Part 13 of CTA 2009”,

(b) omit paragraph (da), and

(c) in paragraph (e) for “Schedule 22 to the Finance Act 2001” substitute “Part 14 of CTA 2009”.

(3) Omit subsection (3AA).

(4) Omit subsections (5) and (5A).

(5) In subsection (7C)—

(a) in paragraph (b) for “section 83(2)(c) of the Finance Act 1996 or paragraph 4(3) of Schedule 11 to that Act” substitute “section 389(1) or 459(1)(b) of CTA 2009”, and

(b) in the words following paragraph (c) for “section 83(2)(c) of that Act or, as the case may be, paragraph 4(3) of Schedule 11 to that Act” substitute “section 389(1) or 459(1)(b) of CTA 2009”.

(6) In subsection (8A)—

(a) in paragraph (a) for “(d), (da)” substitute “, (d)”, and

(b) in paragraph (b)(ii), omit “, tax credit under Schedule 13 to the Finance Act 2002”.

(7) In subsection (8BA), omit (in both places) “, tax credit under Schedule 13 to the Finance Act 2002”.

268 Omit section 827 (VAT penalties etc).

269 (1) Amend section 828 (orders and regulations made by the Treasury or the Board) as follows.

(2) In subsection (4) omit “79B(5),”.

(3) In subsection (5)—

(a) for “or section 717 of ITEPA 2003” substitute “, section 717 of ITEPA 2003 or section 1310 of CTA 2009”,

(b) in paragraph (a) for “or ITEPA 2003” substitute “, ITEPA 2003 or CTA 2009”, and

(c) in paragraph (b) for “either” substitute “any”.

270 Omit section 830(2) to (4) (territorial sea and designated areas).

271 In section 831(3) (interpretation of ICTA) before the definition of “ITEPA 2003” insert—

““CTA 2009” means the Corporation Tax Act 2009;”.

272 (1) Amend section 832 (interpretation of the Corporation Tax Acts) as follows.

(2) In subsection (1)—

(a) omit the definition of “overseas property business”, and

(b) omit the definition of “Schedule A business”.

(3) Omit subsection (4).

273 (1) Amend section 834 (interpretation of the Corporation Tax Acts) as follows.

(2) In subsection (1)—

(a) in the definition of “accounting period” for “section 12” substitute “Chapter 2 of Part 2 of CTA 2009”,

(b) at the appropriate place insert—

““the charge to corporation tax on income” has the same meaning as in CTA 2009 (see section 2(3));”,

(c) in the definition of “chargeable profits”, for “section 11(2)” substitute “section 19 of CTA 2009”,

(d) in the definition of “derivative contract” for “Schedule 26 to the Finance Act 2002” substitute “Part 7 of CTA 2009”,

(e) at the appropriate place insert—

““income” includes anything to which the charge to corporation tax on income applies;”,

(f) in the definition of “loan relationship” for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”,

(g) in the definition of “non-trading deficit” for “section 82 of the Finance Act 1996” substitute “section 301 of CTA 2009”, and

(h) at the appropriate place insert—

““registered industrial and provident society” means—

(a) a society registered or treated as registered under the Industrial and Provident Societies Act 1965 or the Industrial and Provident Societies Act (Northern Ireland) 1969, or

(b) an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Co-Operative Society;”.

(3) In subsection (2)—

(a) for “sections 75 and 76” substitute “section 76”, and

(b) at the end insert—

• “section 834C.”

(4) In subsection (4) (apportionment to different periods) after “those Acts” insert “, other than CTA 2009,”.

274 After section 834 insert—

“834A Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)

(1) In the Corporation Tax Acts references to any provision to which this section applies are references to any provision listed in the following table, so far as the provision relates to corporation tax (but subject to any applicable limitation in subsection (3)).

(2) This is the table—

PART 1

Provisions of this Act	Description
Section 56(2)	Transactions in deposits
Section 214(1)(ab)	Chargeable payments connected with exempt distributions
Section 436A(1)	Gross roll-up business: separate charge on profits
Section 442A(1)	Taxation of investment return where risk reinsured
Section 571(1)	Cancellation of tax certificates
Section 730(6)	Transfers of income arising from securities
Section 761(1)(b)(ii)	Offshore income gains
Section 774(1)	Transactions between dealing company and associated company
Section 776(3A)	Transactions in land
Section 780(3A)(b)	Sale and leaseback: taxation of consideration received
Section 781(1)	Assets leased to traders and others
Section 786(5)(b)	Transactions associated with loans or credit

PART 2

Provisions of CTA 2009	Description
Chapter 15 of Part 3	Post-cessation receipts: trades
Chapter 7 of Part 4	Rent receivable in connection with a UK section 39(4) concern
Chapter 8 of Part 4	Rent receivable for UK electric-line wayleaves
Chapter 9 of Part 4	Post-cessation receipts: UK property businesses
Section 752	Non-trading gains on intangible fixed assets
Section 908	Profits from disposals of know-how
Section 912	Profits from sales of patent rights
Section 965(4)	Adjustments after the administration period
Chapter 8 of Part 10	Income not otherwise charged
Section 986(4), so far as it relates to an amount treated as received under section 998(3)	Withdrawal of deductions if approval for share incentive plan withdrawn: non-trading cases
Section 1083(5)	Refunds of expenditure on research and development
Section 1229	Management expenses: claw back of relief
Section 1252	Industrial development grants: companies with investment business
Section 1253	Contributions to local enterprise organisations or urban regeneration companies: disqualifying benefits
Section 1254	Repayments under the Financial Services and Markets Act 2000
Section 1277(4)	Withdrawal of relief for unremittable foreign income after source ceases

PART 3

Other provisions	Description
Section 85(1) of the Finance Act 1989	Certain receipts of basic life assurance and general annuity business
Section 85A(1) of the Finance Act 1989	Excess adjusted life assurance trade profits
Paragraph 3(1) of Schedule 12 to the Finance (No 2) Act 1992	Banks etc in compulsory liquidation
Section 256(2) of the Capital Allowances Act	Life assurance business: capital allowances
Section 131(4) of the Finance Act 2004	Companies in partnership
Section 27(2) of the Finance (No 2) Act 2005	Avoidance involving tax arbitrage: qualifying payments
Section 112(1) of the Finance Act 2006	Real estate investment trusts: entry charge

(3) The reference in Part 2 of the above table to Chapter 8 of Part 10 of CTA 2009 does not include that Chapter so far as relating to income which arises from a source outside the United Kingdom.”

275 After section 834A insert—

“834B Meaning of “UK property business” and “overseas property business”

In the enactments relating to corporation tax “UK property business” and “overseas property business” have the meaning given by Chapter 2 of Part 4 of CTA 2009.”

276 After section 834B insert—

“834C Total profits

(1) In the Corporation Tax Acts references to total profits, in relation to an accounting period of a company, are to the amount arrived at by adding together—

(a) the amounts chargeable for the period under the charge to corporation tax on income, and

(b) any amount to be included for the period in respect of chargeable gains (see section 8 of the 1992 Act).

(2) Subsection (1) is subject to the provisions of the Corporation Tax Acts.”

277 (1) Amend section 842 (investment trusts) as follows.

(2) In subsection (1AB) for “Chapter 2 of Part 4 of the Finance Act 1996” substitute “Part 5 of CTA 2009”.

(3) In subsection (1AC) for the words from “falls” to the end substitute “is charged to corporation tax under section 1229(3)(b) of CTA 2009 (claw back of relief for expenses of management)”.

(4) After subsection (2C) insert—

“(2D) For the purpose of determining whether a company may be approved for the purposes of this section for an accounting period, the excess of any relevant credits arising in that period over any relevant debits so arising is treated for the purposes of this section as income derived from shares or securities.

(2E) In subsection (2D) “relevant credits” and “relevant debits”, in relation to an accounting period, means credits and debits which are brought into account in respect of that period by virtue of section 574 of CTA 2009 (non-trading credits and debits to be brought into account under Part 5 of that Act).”

278 Omit Schedule A1 (determination of profits attributable to permanent establishment: supplementary provisions).

279 Omit Schedule 4AA (share incentive plans: corporation tax deductions).

280 Omit Schedule 5 (treatment of farm animals etc for purposes of Case I of Schedule D).

281 In paragraph 13(3) of Schedule 18A (group relief: overseas losses of non-resident companies) for “Schedule A purposes” substitute “the purpose of calculating the profits of a UK property business under Part 4 of CTA 2009”.

282 (1) Amend Schedule 19ABA (modification of life assurance provisions of the Corporation Tax Acts in relation to BLAGAB group reinsurers) as follows.

(2) In paragraph 9 for “Case I of Schedule D” substitute “section 35 of CTA 2009”.

(3) In the italic cross-heading before paragraph 9 for “Case I of Schedule D” substitute “section 35 of CTA 2009”.

(4) In paragraph 23 for “Case I” substitute “life assurance trade”.

(5) In the italic cross-heading before paragraph 23 for “Case I” substitute “life assurance trade”.

283 In paragraph 6(6)(b) of Schedule 19B (petroleum extraction activities: exploration expenditure supplement), at the end insert “or starts to be within the charge to corporation tax in respect of such a ring fence trade.”

284 (1) Amend Schedule 19C (petroleum extraction activities: ring fence expenditure supplement) as follows.

(2) In paragraph 6(6)—

(a) in paragraph (a), for “paragraph 14 of Schedule 20 to the Finance Act 2000” substitute “section 1045 of CTA 2009”, and

(b) in paragraph (b), for “that Schedule” substitute “section 1054 of that Act”.

(3) In paragraph 6(9) for the words from “qualifying expenditure” to “2002” substitute “qualifying Chapter 5 expenditure as defined by section 1076 of CTA 2009”.

285 (1) Amend Schedule 23A (manufactured dividends and interest) as follows.

(2) In paragraph 4 (manufactured overseas dividends)—

(a) in sub-paragraph (1A)(b) for “section 75” substitute “Part 16 of CTA 2009”, and

(b) in sub-paragraph (9) for “section 97 of the Finance Act 1996” and “Chapter II of Part IV” substitute “Chapter 9 of Part 6 of CTA 2009” and “Part 5” respectively.

(3) In paragraph 7(1A) (irregular manufactured payments) for “section 97 of the Finance Act 1996” and “Chapter II of Part IV” substitute “section 540 of CTA 2009” and “Part 5” respectively.

(4) In paragraph 7A (manufactured payments under arrangements having an unallowable purpose)—

(a) in sub-paragraph (8)—

(i) in paragraph (a) for “section 75(4)(b)” substitute “section 1219(2)(b) of CTA 2009”,

(ii) in paragraph (c) for “paragraph 13 of Schedule 9 to the Finance Act 1996” substitute “section 441 of CTA 2009”, and

(iii) in the second sentence for the words from the beginning to “effect” substitute “The reference to section 76 is a reference to that section as it has effect”, and

(b) in sub-paragraph (10), in paragraph (c) of the definition of “relevant tax relief” for “Chapter 2 of Part 4 of the Finance Act 1996” substitute “Part 5 of CTA 2009”.

286 (1) Amend Schedule 24 (assumptions for calculating chargeable profits, creditable tax and corresponding United Kingdom tax of foreign companies) as follows.

(2) In paragraph 1(3) (general) for “section 154(2) of the Finance Act 1996” substitute “section 1279 of CTA 2009”.

(3) In paragraph 12 (unremittable overseas income)—

(a) for “section 584” substitute “Part 18 of CTA 2009”,

(b) for “paragraph (a) or paragraph (b) of subsection (1) of that section” substitute “section 1274(3) or (4) of that Act”, and

(c) for the words from “a notice” to “given” substitute “a claim under section 1275 of that Act (claim for relief for unremittable income) may be made”.

287 (1) Amend Schedule 25 (cases where section 747(3) does not apply) as follows.

(2) In paragraph 2(1A)—

(a) for paragraph (a) substitute—

“(a) it is chargeable neither under Chapter 2 of Part 3 of CTA 2009 as profits of a trade carried on wholly or partly in the United Kingdom nor under section 436A (gross roll-up business: separate charge on profits);”, and

(b) in paragraph (b) for the words from “Case I” to “above” substitute “Chapter 2 of Part 3 of CTA 2009 as profits of a trade carried on wholly or partly in the United Kingdom, or under section 436A”.

(3) In paragraph 2(1B)(a) for “section 208” substitute “section 1285 of CTA 2009”.

(4) In paragraph 4(1A)—

(a) for paragraph (a) substitute—

“(a) it is chargeable neither under Chapter 2 of Part 3 of CTA 2009 as profits of a trade carried on wholly or partly in the United Kingdom nor under section 436A (gross roll-up business: separate charge on profits);”, and

(b) in paragraph (b) for the words from “Case I” to “above” substitute “Chapter 2 of Part 3 of CTA 2009 as profits of a trade carried on wholly or partly in the United Kingdom, or under section 436A”.

(5) In paragraph 12(6) for “Case I of Schedule D” substitute “section 35 of CTA 2009”.

288 In Schedule 26 (reliefs against liability for tax in respect of chargeable profits) in paragraph 1(3)(c) for “section 75(1)” substitute “section 1219(1) of CTA 2009”.

289 (1) Amend Schedule 27 (distributing funds) as follows.

(2) In paragraph 1(1)(d)(ii)—

(a) omit the words from “in accordance” to “(Schedule D)”,

(b) for “Case III of Schedule D” substitute “Part 5 of CTA 2009 (loan relationships) or Chapter 7 of Part 10 of that Act (annual payments not otherwise charged)”, and

(c) for “Case V of Schedule D” substitute “Chapter 2 of Part 10 of CTA 2009 (dividends of non-UK resident companies) or Chapter 8 of that Part (income not otherwise charged)”.

(3) For the heading for paragraph 3 substitute “Certain foreign income”.

(4) In paragraph 3(1)(aa)—

(a) in sub-paragraph (i) for “Case III of Schedule D” substitute “Part 5 of CTA 2009 (loan relationships) or Chapter 7 of Part 10 of that Act (annual payments not otherwise charged)”, and

(b) in sub-paragraph (ii) for “Case V of Schedule D” substitute “Chapter 2 of Part 10 of CTA 2009 (dividends of non-UK resident companies) or Chapter 8 of that Part (income not otherwise charged)”.

(5) In paragraph 4(3)(b) for “section 75” substitute “section 1219 of CTA 2009”.

(6) In paragraph 5(3)—

(a) in paragraph (c) for “section 208” substitute “section 1285 of CTA 2009”,

(b) in paragraph (d) for “Chapter 2 of Part 4 of the Finance Act 1996” substitute “Part 5 of CTA 2009”, and

(c) in paragraph (e) for “Schedule 26 to the Finance Act 2002” substitute “Part 7 of CTA 2009”.

(7) In paragraph 5(5) for “section 154(2) of the Finance Act 1996” substitute “section 1279 of CTA 2009”.

290 (1) Amend Schedule 28A (change in ownership of company with investment business deductions) as follows.

(2) In paragraph 6 (amounts in issue for purposes of section 768B)—

(a) in sub-paragraph (a)—

(i) for “within the meaning of section 75” substitute “within the meaning of Chapter 2 of Part 16 of CTA 2009”, and

(ii) for “under section 75” substitute “under section 1219 of CTA 2009 (expenses of management of a company’s investment business)”,

(b) in sub-paragraph (c) for “section 75(9)” substitute “section 1223 of CTA 2009 (expenses of management carried forward)”,

(c) in sub-paragraph (d) for “section 75(7)” substitute “section 1233 of CTA 2009 (excess capital allowances)”,

(d) in sub-paragraph (da) for “Case III profits and gains” substitute “non-trading profits”,

(e) in sub-paragraph (db) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”,

(f) in sub-paragraph (dc) for “section 83(3A) of the Finance Act 1996” substitute “section 457(1) of CTA 2009”,

(g) omit sub-paragraph (dd),

(h) in sub-paragraph (de) for “paragraph 34 of Schedule 29 to the Finance Act 2002” substitute “section 751 of CTA 2009”, and

(i) in sub-paragraph (df) for “paragraph 35(3) of that Schedule” substitute “section 753(3) of CTA 2009”.

(3) In paragraph 6A—

(a) for “Case III profits and gains” substitute “non-trading profits”,

(b) for sub-paragraph (a) substitute—

“(a) the amount of the profits arising from the company’s loan relationships chargeable under section 299 of CTA 2009 (charge to tax on non-trading profits),”, and

(c) in the words following sub-paragraph (b) for “to (dd)” substitute “or (dc)”.

(4) In paragraph 7(1)—

(a) in sub-paragraph (d)(ii) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”,

(b) in sub-paragraph (d)(iii) for “paragraph 2(2) of Schedule 9 to” substitute “section 373 of”,

(c) in sub-paragraph (d)(iv) for “paragraph 17 or 18 of that Schedule” substitute “sections 406 to 412 of that Act”, and

(d) in sub-paragraph (e)(ii) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”.

(5) In paragraph 9—

(a) in sub-paragraph (1) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”, and

(b) in sub-paragraph (2)(b) for “that Chapter” substitute “that Part”.

(6) In paragraph 10—

(a) in sub-paragraph (1) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”, and

(b) in sub-paragraph (3)(b) for “paragraph 1(2) of Schedule 8 to the Finance Act 1996” substitute “section 461 of CTA 2009”.

(7) In paragraph 11—

(a) in sub-paragraph (1)(a) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”,

(b) in sub-paragraph (1)(b)(i) for “paragraph 17 or 18 of Schedule 9 to” substitute “sections 406 to 412 of”,

(c) in sub-paragraph (1)(b)(ii) for “sub-paragraph (2) of paragraph 2 of that Schedule” substitute “section 373(1) of that Act”,

(d) in sub-paragraph (1)(c) for “paragraphs 2(2), 17 and 18 of that Schedule” substitute “sections 373 and 406 to 412 of that Act”,

(e) omit sub-paragraph (2),

(f) in sub-paragraph (3)(a) omit “or (2)”, and

(g) in sub-paragraph (3)(c) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”.

(8) In paragraph 12 for “Chapter II of Part IV of the Finance Act 1996” and “that Chapter” substitute “Part 5 of CTA 2009” and “that Part” respectively.

(9) In paragraph 13—

(a) in sub-paragraph (1)(ea) for “Case III profits and gains” substitute “non-trading profits”,

(b) in sub-paragraph (1)(eb) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”,

(c) in sub-paragraph (1)(ec) for “section 83(3A) of the Finance Act 1996” substitute “section 457(1) of CTA 2009”,

(d) omit sub-paragraph (1)(ed),

(e) in sub-paragraph (ee) for “paragraph 34 of Schedule 29 to the Finance Act 2002” substitute “section 751 of CTA 2009”, and

(f) in sub-paragraph (ef) for “paragraph 35(3) of that Schedule” substitute “section 753(3) of CTA 2009”.

(10) In paragraph 16—

(a) in sub-paragraph (1)(d)(ii) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”,

(b) in sub-paragraph (1)(d)(iii) for “paragraph 2(2) of Schedule 9 to” substitute “section 373(1) of”,

(c) in sub-paragraph (1)(d)(iv) for “paragraph 17 or 18 of that Schedule” substitute “sections 406 to 412 of that Act”,

(d) in sub-paragraph (1)(e)(ii) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”, and

(e) omit sub-paragraph (1)(f).

291 (1) Amend Schedule 28AA (provision not at arm’s length) as follows.

(2) In paragraph 1(2) for “8, 10 and 13 below,” substitute “10 and 13 below and sections 447(5) and (6) and 694(8) and (9) of CTA 2009,”.

(3) In paragraph 2(1) for “8 to 11 below” substitute “9 to 11 below and sections 447(5) and (6) and 694(8) and (9) of CTA 2009”.

(4) In paragraph 6A(3) for the words from “the same meaning as” to the end substitute “the meaning given by section 174 of ITTOIA 2005 or section 163 of CTA 2009.”

(5) In paragraph 6E—

(a) omit “Case III of Schedule D or”, and

(b) after “2005” insert “or required to be brought into account under Part 5 of CTA 2009 as a non-trading credit”.

(6) In the heading above paragraph 6E for “chargeable under Case III of Schedule D” substitute “chargeable”.

(7) Omit paragraph 8(1), (3) and (4).

(8) In paragraph 14(1), in the definition of “losses”—

(a) in paragraph (a) for “section 75(9)” substitute “section 1223 of CTA 2009”, and

(b) for paragraph (d) substitute—

“(d) sections 387 to 391 or Chapter 16 of Part 5 of CTA 2009 (deficits on loan relationships);”.

292 (1) Amend Schedule 30 (transitional provisions and savings) as follows.

(2) Omit paragraphs 2 to 4.

(3) Omit paragraph 5.

(4) In paragraph 7(5)(b) after “business” insert “, or begins to carry on a trade,”.