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Corporation Tax Act 2009

Status:

This is the original version (as it was originally enacted).

SCHEDULES

Section 1322

SCHEDULE 1Minor and consequential amendments

Part 1Income and Corporation Taxes Act 1988

1The 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).

3Omit 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).

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

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

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

8Omit section 15 (Schedule A).

9Omit section 18 (Schedule D).

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

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

12Omit 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).

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

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

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

17Omit 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”.

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

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

21Omit 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.

23Omit section 70 (basis of assessment etc).

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

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

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

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

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

29Omit 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).

31After section 76 insert—

Payments for restrictive undertakings

76ZAPayments 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.

32After section 76ZA insert—

Seconded employees

76ZBEmployees 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.

33After section 76ZB insert—

Counselling and retraining expenses

76ZCCounselling 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.

34After section 76ZC insert—

76ZDRetraining 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.

35After section 76ZD insert—

76ZERetraining 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.

36After section 76ZE insert—

Redundancy payments etc

76ZFRedundancy 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.

37After section 76ZF insert—

76ZGPayments 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.

38After section 76ZG insert—

76ZHPayments 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.

39After section 76ZH insert—

76ZIAdditional 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.

40After section 76ZI insert—

76ZJPayments 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.

41After section 76ZJ insert—

Contributions to local enterprise organisations or urban regeneration companies

76ZKContributions 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).

42After section 76ZK insert—

Unpaid remuneration

76ZLUnpaid 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.

43After section 76ZL insert—

76ZMUnpaid 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.

44After section 76ZM insert—

Car or motor cycle hire

76ZCar 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.

45After section 76ZN insert—

76ZOHiring 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.

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

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

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

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

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

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

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

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

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

55Omit 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).

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

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

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

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

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

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

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

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

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

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

67Omit section 91 (cemeteries).

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

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

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

71Omit section 92 (regional development grants).

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

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

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

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

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

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

78Omit section 99 (dealers in land).

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

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

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

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

83Omit section 110 (interpretation etc).

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

85Omit 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).

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

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

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

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

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

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

93Omit 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”.

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

96Omit 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).

98In 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.

100In 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

230ADividend 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.

101In 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)”.

102In 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)”.

103Omit 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.

107In 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”.

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

110In 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,”.

111In 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.”

114In 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.

117Omit 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”.

119In 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.

121In 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)”.

123In 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”.

124After section 411 insert—

411ZANo 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.

125In 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”.

128In 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”.

133In 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)”.

136In 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)”.

137In 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”.

140In 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)”.

141In 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”.

144In 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”.

152In 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”.

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

154In 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”.

155In 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)”.

156In 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)”.

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

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

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

160In 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.

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

162Omit 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”.

164Omit section 487 (credit unions).

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

166In 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”.

169In 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).

171In 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)”.

172In 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,”.

173Omit 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”.

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

177In 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.

178For 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.

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

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

181Omit section 526 (relief for expenses).

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

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

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

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

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

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

188In 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,”.

189In 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.

191Omit section 577 (business entertaining expenses).

192Omit section 577A (expenditure involving crime).

193Omit section 578 (housing grants).

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

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

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

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

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

199In 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),”.

200Omit section 588 (training courses for employees).

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

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

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

204Omit section 695 (limited interests in residue).

205Omit section 696 (absolute interests in residue).

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

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

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

209In 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.

210Omit section 701 (interpretation).

211Omit section 702 (application to Scotland).

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

213In 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”.

214In 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)”.

215In 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”.

216In 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)”.

217In 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”.

218In 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”.

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

226In 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)”.

228In 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”.

229In 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);.

233In 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);.

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

236In 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”.

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

238In 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)”.

239In 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”.

240In 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).

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

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

245In 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)”.

248In 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.

250In 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”.

252In 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)”.

254In 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”.

255In 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)”.

257After section 807A insert—

European cross-border transfers of business

807BIntroduction 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.

258After section 807B insert—

807CTax 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.

259After section 807C insert—

European cross-border mergers

807DIntroduction 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.

260After section 807D insert—

807ETax 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.

261After section 807E insert—

Transparent entities involved in cross-border transfers and mergers

807FIntroduction 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.

262After section 807F insert—

807GTax 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.

263In 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.

264In 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.

265Omit section 817 (deductions not to be allowed in computing profits or gains).

266In 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”.

268Omit 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”.

270Omit section 830(2) to (4) (territorial sea and designated areas).

271In 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,”.

274After section 834 insert—

834AMiscellaneous 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 ActDescription
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 2009Description
Chapter 15 of Part 3Post-cessation receipts: trades
Chapter 7 of Part 4Rent receivable in connection with a UK section 39(4) concern
Chapter 8 of Part 4Rent receivable for UK electric-line wayleaves
Chapter 9 of Part 4Post-cessation receipts: UK property businesses
Section 752Non-trading gains on intangible fixed assets
Section 908Profits from disposals of know-how
Section 912Profits from sales of patent rights
Section 965(4)Adjustments after the administration period
Chapter 8 of Part 10Income 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 1229Management expenses: claw back of relief
Section 1252Industrial development grants: companies with investment business
Section 1253Contributions to local enterprise organisations or urban regeneration companies: disqualifying benefits
Section 1254Repayments under the Financial Services and Markets Act 2000
Section 1277(4)Withdrawal of relief for unremittable foreign income after source ceases
PART 3
Other provisionsDescription
Section 85(1) of the Finance Act 1989Certain receipts of basic life assurance and general annuity business
Section 85A(1) of the Finance Act 1989Excess adjusted life assurance trade profits
Paragraph 3(1) of Schedule 12 to the Finance (No 2) Act 1992Banks etc in compulsory liquidation
Section 256(2) of the Capital Allowances ActLife assurance business: capital allowances
Section 131(4) of the Finance Act 2004Companies in partnership
Section 27(2) of the Finance (No 2) Act 2005Avoidance involving tax arbitrage: qualifying payments
Section 112(1) of the Finance Act 2006Real 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.

275After section 834A insert—

834BMeaning 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.

276After section 834B insert—

834CTotal 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).

278Omit Schedule A1 (determination of profits attributable to permanent establishment: supplementary provisions).

279Omit Schedule 4AA (share incentive plans: corporation tax deductions).

280Omit Schedule 5 (treatment of farm animals etc for purposes of Case I of Schedule D).

281In 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”.

283In 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”.

288In 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,”.

Part 2Other enactments

Finance Act 1950 (c. 15)

293The Finance Act 1950 is amended as follows.

294In section 39(3) (treatment for taxation purposes of enemy debts etc written off during the war), in paragraph (b) of the proviso—

(a)in sub-paragraph (i) for “section 75(1) of the Income and Corporation Taxes Act 1988” substitute “section 1219 of the Corporation Tax Act 2009”, and

(b)in sub-paragraph (ii) for “that Act” substitute “the Income and Corporation Taxes Act 1988”.

Taxes Management Act 1970 (c. 9)

295The Taxes Management Act 1970 is amended as follows.

296In section 12(5) (information about chargeable gains) for “section 100(2) of the principal Act” substitute “section 163 of CTA 2009”.

297Omit section 12AE (choice between different Cases of Schedule D).

298In section 17 (interest paid or credited by banks, building societies etc without deduction of income tax) after subsection (7) insert—

(8)References in this section to interest include references to—

(a)alternative finance return within the meaning of Chapter 5 of Part 2 of the Finance Act 2005 (see section 57 of that Act), and

(b)alternative finance return within the meaning of Chapter 6 of Part 6 of CTA 2009 (see sections 511 to 513 of that Act).

299In section 18 (interest paid without deduction of income tax) at the end insert—

(5)References in this section to interest include references to—

(a)alternative finance return within the meaning of Chapter 5 of Part 2 of the Finance Act 2005 (see section 57 of that Act), and

(b)alternative finance return within the meaning of Chapter 6 of Part 6 of CTA 2009 (see sections 511 to 513 of that Act).

300(1)Amend section 19 (information for purposes of charge on profits of UK property business or under Schedule A) as follows.

(2)In subsection (1) for “as the profits of a UK property business or under Schedule A” substitute “, or under Chapter 3 of Part 4 of CTA 2009, as the profits of a UK property business”.

(3)Omit subsection (2).

301Omit section 31(3) (appeals: right of appeal).

302In section 42(7) (procedure for making claims etc)—

(a)in paragraph (a)—

(i)omit “, 84, 91B, 101(2),” and “504, 531,”, and

(ii)for the words from “571(4)” to the end substitute “571(4) and 732(4) of the principal Act;”,

(b)omit paragraph (b),

(c)omit the “and” immediately after paragraph (e), and

(d)at the end insert , and

(“g)sections 109(1), 124(2), 127(2), 178 and 268 of CTA 2009.

303In section 46B(5) (questions to be determined by Special Commissioners), after paragraph (d) insert or

(f)section 1313 of CTA 2009.

304In section 71(1) (bodies of persons) omit the words from “Subject to” to “companies),”.

305In section 87A(4A)(b) (interest on overdue corporation tax etc) for “section 83(2)(c)” to “that Act” substitute “section 389(1) or 459(1)(b) of CTA 2009”.

306(1)Amend section 90 (disallowance of relief for interest on tax) as follows.

(2)In subsection (1) omit paragraph (b) and the “and” immediately before that paragraph.

(3)Omit subsection (2).

(4)For the title substitute “Interest on tax payable gross”.

307(1)Amend section 98 (special returns, etc) as follows.

(2)In the first column of the Table—

(a)omit the entry relating to section 38(5) of ICTA,

(b)at the appropriate place in the list of entries relating to ICTA insert—

  • section 76ZE(5);,

(c)omit the entry relating to section 588(7) of ICTA,

(d)omit the entry relating to paragraph 10 of Schedule 5 to ICTA, and

(e)at the end insert—

  • Section 75(5) of CTA 2009;

  • Section 126 of CTA 2009;

  • Section 241 of CTA 2009;

  • Section 245 of CTA 2009;

  • Section 966(1) of CTA 2009.

(3)In the second column of the Table—

(a)at the appropriate place in the list of entries relating to ICTA insert—

  • section 76ZE(4);,

(b)omit the entry relating to section 577(4) of ICTA,

(c)omit the entry relating to section 588(6) of ICTA, and

(d)at the end insert—

  • Section 75(4) of CTA 2009.

308After section 109 insert—

109AResidence of companies

Chapter 3 of Part 2 of CTA 2009 (rules for determining residence of companies) applies for the purposes of this Act as it applies for the purposes of the Corporation Tax Acts.

309In section 118 (interpretation) at the appropriate place insert—

“CTA 2009” means the Corporation Tax Act 2009,.

310In Schedule 3 (rules for assigning proceedings to General Commissioners), in paragraph 10—

(a)omit “102(1),” and

(b)for “and section 563 of the Capital Allowances Act.” substitute “, section 563 of the Capital Allowances Act and section 171 of CTA 2009.”

Finance Act 1973 (c. 51)

311The Finance Act 1973 is amended as follows.

312In paragraph 2(a) of Schedule 15 (territorial extension of charge to tax_supplementary provisions) for “or section 874 of the Income Tax (Trading and Other Income) Act 2005;” substitute “, section 874 of the Income Tax (Trading and Other Income) Act 2005 or section 1313 of the Corporation Tax Act 2009;”.

Oil Taxation Act 1975 (c. 22)

313The Oil Taxation Act 1975 is amended as follows.

314In section 3(2) (allowance of expenditure (other than expenditure on long-term assets and abortive exploration expenditure)) in the first sentence—

(a)omit “under subsection (2) of section 579 of the Taxes Act or”,

(b)after “(“ITTOIA 2005”)” insert “or section 77 of the Corporation Tax Act 2009”, and

(c)omit “that subsection or”.

Inheritance Tax Act 1984 (c. 51)

315The Inheritance Tax Act 1984 is amended as follows.

316(1)Amend section 91 (administration period) as follows.

(2)In subsection (2) for paragraph (c) substitute—

(c)subject to subsection (3) below, “charges on residue” means, in relation to the estate of a deceased person, the following liabilities properly payable out of the estate and interest payable in respect of those liabilities—

(i)funeral, testamentary and administration expenses and debts,

(ii)general legacies, demonstrative legacies, annuities and any sum payable out of the residue of the estate to which a person is entitled under the law of intestacy of any part of the United Kingdom or any other country, and

(iii)any other liabilities of the deceased person’s personal representatives as such,

(d)“specific disposition” has the meaning given in section 947(6) of the Corporation Tax Act 2009, and

(e)the reference to the completion of the administration of the estate shall be construed as if it were in Chapter 3 of Part 10 of that Act.

(3)After subsection (2) insert—

(3)If, as between—

(a)persons interested under a specific disposition or in a general or demonstrative legacy or in an annuity, and

(b)persons interested in the residue of an estate,

any such liabilities as are mentioned in paragraph (c) of subsection (2) above fall exclusively or primarily on the property that is the subject of the specific disposition or on the legacy or annuity, only such part (if any) of those liabilities as falls ultimately on the residue shall be treated as charges on residue.

(4)In the application of this section to Scotland, “charges on residue” shall include, in addition to the liabilities specified in subsection (2)(c), any sums required to meet—

(a)claims in respect of prior rights or legal rights by a surviving spouse or civil partner, or

(b)claims in respect of legal rights by children.

317In section 94(2)(a) (charge on participators) for “section 208 of the Taxes Act 1988” substitute “section 1285 of the Corporation Tax Act 2009 (exemption for UK company distributions)”.

Films Act 1985 (c. 21)

318The Films Act 1985 is amended as follows.

319In paragraph 1(1) of Schedule 1 (certification of British films for the purposes of film tax relief), in the definition of “film production company”, for the words from “Chapter 3” to the end substitute “Part 15 of the Corporation Tax Act 2009 (see section 1182 of that Act)”.

Airports Act 1986 (c. 31)

320The Airports Act 1986 is amended as follows.

321In section 77(3) (corporation tax) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of the Corporation Tax Act 2009”.

Finance Act 1986 (c. 41)

322The Finance Act 1986 is amended as follows.

323In section 78(7)(d) (loan capital) after “2005” insert “or section 507 of the Corporation Tax Act 2009”.

324In section 79 (loan capital: new provisions)—

(a)in subsection (6), as it has effect by virtue of subsection (8A)(a) of that section, after “2005”, in both places where it occurs, insert “or section 507(1) of the Corporation Tax Act 2009”, and

(b)in subsection (8A)(b) after “2005” insert “or section 507 of the Corporation Tax Act 2009”.

325In section 99(9A) (interpretation) after “2005” insert “or section 507 of the Corporation Tax Act 2009”.

Gas Act 1986 (c. 44)

326The Gas Act 1986 is amended as follows.

327In section 60(3) (tax provisions) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of the Corporation Tax Act 2009”.

British Steel Act 1988 (c. 35)

328The British Steel Act 1988 is amended as follows.

329In section 11(7) (corporation tax) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of the Corporation Tax Act 2009”.

Finance Act 1988 (c. 39)

330The Finance Act 1988 is amended as follows.

331Omit section 65 (commercial woodlands).

332Omit section 66 (company residence).

333Omit section 66A (residence of SE or SCE).

334Omit section 73(2) to (4) (consideration for certain restrictive undertakings).

335Omit Schedule 6 (commercial woodlands).

336Omit Schedule 7 (exceptions to the rule in section 66(1)).

337In paragraph 3 of Schedule 12 (building societies: change of status)—

(a)omit sub-paragraph (1), and

(b)in sub-paragraph (2) for “those Acts” substitute “the Capital Allowances Act 2001”.

Finance Act 1989 (c. 26)

338The Finance Act 1989 is amended as follows.

339Omit section 43 (Schedule D: computation (unpaid remuneration)).

340Omit section 44 (companies with investment business and insurance companies: computation).

341In section 82(1) (calculation of profits: bonuses etc) for the words from “, for” to the end substitute “computed in accordance with the provisions applicable for the purposes of the taxation of such profits under section 35 of the Corporation Tax Act 2009 (charge on trade profits)”.

342In section 82D(2) (treatment of profits: life assurance_adjustment consequent on change in Insurance Prudential Sourcebook) for the words from “for the purposes” to “Schedule D” substitute “in accordance with the life assurance trade profits provisions”.

343In section 82E(7) (section 82D: treatment of transferors under insurance business transfer schemes) for the words from “for the purposes” to “Schedule D” substitute “in accordance with the life assurance trade profits provisions”.

344(1)Amend section 83 (receipts to be taken into account) as follows.

(2)In subsection (1) for the words from “, for” to the end substitute “computed in accordance with the provisions applicable for the purposes of the taxation of such profits under section 35 of the Corporation Tax Act 2009 (charge on trade profits)”.

(3)For subsection (2ZA)(a) to (c) substitute—

(a)section 464 of the Corporation Tax Act 2009 (priority of Part 5 of that Act for corporation tax purposes),

(b)section 699 of that Act (priority of Part 7 of that Act for corporation tax purposes), and

(c)section 906 of that Act (priority of Part 8 of that Act for corporation tax purposes).

(4)In subsection (2AB)(a) for “of the Taxes Act 1988 applicable to Case I of Schedule D” substitute “applicable to the taxation of such profits under section 35 of the Corporation Tax Act 2009”.

345(1)Amend section 83YC (FAFTS: charge in relevant period of account) as follows.

(2)In subsection (6)(b) for “provisions of Case I of Schedule D” substitute “life assurance trade profits provisions”.

(3)In subsection (10) for “provisions of Case I of Schedule D” substitute “life assurance trade profits provisions”.

346In section 83YD(3)(a) (FAFTS: deduction in subsequent periods of account) for “section 82(2)(b) of the Finance Act 1996” substitute “section 297(3) of the Corporation Tax Act 2009”.

347(1)Amend section 83YF (financial reinsurance arrangements: further provision) as follows.

(2)In subsection (2) for “provisions of Case I of Schedule D” substitute “life assurance trade profits provisions”.

(3)In subsection (3) for “provisions of Case I of Schedule D” substitute “life assurance trade profits provisions”.

348(1)Amend section 85 (charge of certain receipts of basic life assurance business) as follows.

(2)In subsection (1)—

(a)for “there shall be chargeable under Case VI of that Schedule” substitute “the charge to corporation tax on income shall apply to”,

(b)in paragraph (a) for “Case I of Schedule D” substitute “section 35 of the Corporation Tax Act 2009 (charge on trade profits)”, and

(c)in paragraph (b) for “Case I of Schedule D” substitute “section 35 of the Corporation Tax Act 2009”.

(3)In subsection (2)(e) for “Case I of Schedule D” substitute “section 35 of the Corporation Tax Act 2009”.

(4)For subsection (2B) substitute—

(2B)Expenses are deducted from receipts falling within subsection (1) so far as is necessary for calculating the full amount of the profits.

This is subject to subsection (2BA).

(2BA)The provisions of Chapter 1 of Part 20 of the Corporation Tax Act 2009 (general rules for restricting deductions) apply to the calculation of those profits.

349(1)Amend section 85A (excess adjusted Case I profits) as follows.

(2)In subsection (1) for the words “Case I profits under Case VI of that Schedule” substitute “life assurance trade profits under the charge to corporation tax on income”.

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

(4)In subsection (3)—

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

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

(5)In subsection (4) for “Case I of Schedule D” substitute “section 35 of the Corporation Tax Act 2009”.

(6)In subsection (6)(b) omit “under Case VI of Schedule D”.

(7)In subsection (8)—

(a)in paragraph (b)—

(i)after “loan relationships” insert “under Part 5 of the Corporation Tax Act 2009”, and

(ii)omit the words from “by” to “1996”, and

(b)in paragraph (c)—

(i)for “paragraph 4(3) of that Schedule” substitute “section 389(1) of the Corporation Tax Act 2009”, and

(ii)omit “(in accordance with paragraph 4(5) of that Schedule)”.

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

350In section 88(3)(b) (corporation tax: policy holders' share of profits) omit “under Case VI of Schedule D”.

351(1)Amend section 89 (policy holders' share of profits) as follows.

(2)In subsection (1)(a) for “Case I” substitute “life assurance trade”.

(3)In subsection (1A)—

(a)omit “under Case VI of Schedule D”, and

(b)for “Case I”, in both places where it occurs, substitute “life assurance trade”.

(4)In subsection (2) for “Case I” substitute “life assurance trade”.

(5)In subsection (3) for “Case I” substitute “life assurance trade”.

(6)In subsection (4) for “Case I”, in both places where it occurs, substitute “life assurance trade”.

(7)In subsection (7)—

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

(b)for “provisions of the Taxes Act 1988 applicable to Case I of Schedule D” substitute “life assurance trade profits provisions”.

(8)In subsection (7B) for “Case I” substitute “life assurance trade”.

Finance Act 1990 (c. 29)

352The Finance Act 1990 is amended as follows.

353Omit section 126(2) and (3) (pools payments for football ground improvements).

354In Schedule 14 (amendments correcting errors in ICTA) omit paragraph 2.

Finance Act 1991 (c. 31)

355The Finance Act 1991 is amended as follows.

356For section 65(5) (reimbursement by defaulter in respect of certain abandonment expenditure) substitute—

(5)For the purposes of subsection (4) above, the relevant accounting period is the accounting period in which the reimbursement expenditure is received by the contributing participator or, if the contributing participator—

(a)ceases to carry on the ring fence trade before the receipt of the reimbursement expenditure, or

(b)ceases to be within the charge to corporation tax in respect of the ring fence trade before the receipt of the reimbursement expenditure,

the last accounting period of that trade or (as the case requires) the accounting period during or at the end of which the contributing participator ceased to be within the charge to corporation tax in respect of the trade.

357Omit section 121(2) and (3) (pools payments to support games etc).

Taxation of Chargeable Gains Act 1992 (c. 12)

358The Taxation of Chargeable Gains Act 1992 is amended as follows.

359In section 1(2) (the charge to tax) for “section 6 of the Taxes Act” substitute “section 2 of CTA 2009”.

360In section 10B (non-resident company with United Kingdom permanent establishment) for subsection (4) substitute—

(4)In this section—

(a)references to a trade include an office, and

(b)references to carrying on a trade include holding an office.

361In section 33A (value shifting: modification of sections 30 to 33 in relation to chargeable intangible asset)—

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

(b)in subsection (2)—

(i)in paragraph (a) for “that Schedule (see paragraph 19 of that Schedule” substitute “that Part (see section 734 of that Act”,

(ii)in paragraph (b) for “paragraph 55 of that Schedule” substitute “section 775 of that Act”, and

(iii)in paragraph (c) for “paragraph 58 or 60 of that Schedule” substitute “section 780 or 785 of that Act”,

(c)in subsection (3) for “that Schedule (see paragraph 15 of that Schedule” substitute “that Part (see section 723 of that Act”, and

(d)in subsection (4) for “that Schedule” substitute “that Part”.

362In section 40(4) (interest charged to capital) after “relationships)” insert “and CTA 2009 (Part 5 of which re-enacts that Chapter)”.

363In section 41(4) (restriction of losses by reference to capital allowances)—

(a)in paragraph (b)—

(i)omit “any relief given under section 30 of the Taxes Act or”, and

(ii)after “ITTOIA 2005” insert “or section 254 of CTA 2009”, and

(b)in paragraph (c)—

(i)omit “section 91 of the Taxes Act or”, and

(ii)after “ITTOIA 2005” insert “or section 147 of CTA 2009.”

364In section 48(4) (consideration due after time of disposal) for the words from “Chapter 2” to the end substitute “Part 5 of CTA 2009 (see sections 302(5) and 313(6))”.

365(1)Amend section 59 (partnerships) as follows.

(2)In subsection (2)(b) after “capital gains tax” insert “or corporation tax”.

(3)In subsection (3)—

(a)after “arrangements” insert “(so far as providing for that relief)”, and

(b)after “capital gains tax” insert “or corporation tax”.

366(1)Amend section 116 (reorganisations, conversions and reconstructions) as follows.

(2)In subsection (8A)—

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

(b)in the second sentence for the words from “transaction” to the end substitute “relevant loan relationship transaction”.

(3)After subsection (8A) insert—

(8AA)In subsection (8A) “relevant loan relationship transaction” means a transaction to which any of the following provisions applies—

  • section 342 of CTA 2009 (continuity of treatment on transfers within groups or reorganisations: issues of new securities on reorganisations: disposal at notional carrying value),

  • section 343 of that Act (continuity of treatment on transfers within groups or reorganisations: receiving company using fair value accounting),

  • section 424 of that Act (European cross-border transfers of business: reorganisations involving loan relationships),

  • section 425 of that Act (European cross-border transfers of business: original holder using fair value accounting),

  • section 435 of that Act (European cross-border mergers: reorganisations involving loan relationships),

  • section 436 of that Act (European cross-border mergers: original holder using fair value accounting).

(4)In subsection (16) 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.

367After section 116 insert—

116AHolding beginning or ceasing to fall within section 490 of CTA 2009

(1)Section 116 applies in accordance with the following assumptions if—

(a)a holding that is a relevant holding for the purposes of section 490 of CTA 2009 (holdings in OEICs, unit trusts and offshore funds treated as creditor relationship rights) is held by a company both at the end of one accounting period and at the beginning of the next, and

(b)that section applies to the holding for one of those periods but not for the other.

(2)The assumptions in subsections (3) and (4) apply for the purposes of this Act if the accounting period for which section 490 of CTA 2009 applies to the relevant holding is the first of those periods.

(3)The relevant holding is assumed to have ceased to be a relevant holding for the second of those periods as a result of a transaction such as is mentioned in section 116(1) (“the reorganisation transaction”) occurring at the beginning of that period.

(4)In relation to the reorganisation transaction within subsection (3), for the purposes of section 116—

(a)the relevant holding immediately before the beginning of the second of those periods is assumed to be the old asset, and

(b)the relevant holding immediately after the beginning of that period is assumed to be the new asset.

(5)The assumptions in subsections (6) and (8) apply for the purposes of this Act if the accounting period for which section 490 of CTA 2009 applies to the relevant holding is the second of those periods.

(6)The holding is assumed to have become a relevant holding for the second of those periods as a result of the occurrence at the end of first period of a transaction such as is mentioned in section 116(1).

(7)But subsection (6) does not apply if the first of those periods is a period at the end of which a disposal of the relevant holding is treated as having occurred under section 212 (annual deemed disposal of holdings of unit trusts etc by insurance companies).

(8)In relation to the reorganisation transaction within subsection (6), for the purposes of section 116—

(a)the relevant holding immediately before the beginning of the second of those periods is assumed to be the old asset, and

(b)the relevant holding immediately after the beginning of that period is assumed to be the new asset.

116BShares beginning or ceasing to be shares to which section 523 of CTA 2009 applies

(1)If at any time section 523 of CTA 2009 (application of Part 5 of that Act to certain shares as rights under a creditor relationship) begins or ceases to apply in the case of a share held by the investing company it is treated for the purposes of this Act—

(a)as having disposed of the share immediately before that time for consideration of an amount equal to its fair value at that time, and

(b)as having immediately reacquired it for consideration of the same amount.

(2)In this section—

  • “fair value” has the same meaning as in Part 5 of CTA 2009, (loan relationships) (see section 313(6) of that Act), and

  • “investing company” has the same meaning as it has for the purposes of Chapter 7 of Part 6 of that Act (shares with guaranteed returns) (see section 522(3) of that Act).

368In section 117(6D) (meaning of “qualifying corporate bond”) after “section 48A” insert “of that Act or section 507 of CTA 2009”.

369In section 143(1) (commodity and financial futures and qualifying options)—

(a)for “section 128 of the Taxes Act” substitute “section 981 of CTA 2009”, and

(b)in paragraph (a) for “Schedule D otherwise than as the profits of a trade” substitute “Chapter 8 of Part 10 of CTA 2009”.

370After section 151D insert—

151EExchange gains and losses from loan relationships: regulations

(1)The Treasury may by regulations make provision for or in connection with bringing into account in prescribed circumstances for the purposes of this Act amounts to which section 328(1) of CTA 2009 does not apply because of section 328(3) or (4) of that Act.

(2)The regulations may—

(a)make different provision for different cases, and

(b)make provision subject to an election or to other prescribed conditions.

151FTreatment of alternative finance arrangements

(1)This section applies if under arrangements to which section 503 (purchase and resale arrangements), 504 (diminishing shared ownership arrangements) or 507 (investment bond arrangements) of CTA 2009 applies an asset is sold by one party to the arrangements to the other party.

(2)The alternative finance return (as defined in section 511, 512 or 513(3) of that Act, as the case may be) is excluded in determining for the purposes of this Act the consideration for the sale and purchase of the asset.

(3)This section does not affect the operation of any provision of this Act which provides that the consideration for a sale or purchase is to be taken for any purpose to be an amount other than the actual consideration.

151GRegulations where non-qualifying shares conditions altered

(1)If the Treasury make regulations under section 533 of CTA 2009 (power to change conditions for non-qualifying shares) adding, varying or removing such a condition as is mentioned in subsection (1) of that section, they may also by regulations amend this Act so as to make provision for or in connection with taxation in the case of any asset or transaction that is or was mentioned in the condition.

(2)Regulations under this section may—

(a)make different provision for different cases, and

(b)make incidental, supplemental, consequential and transitional provisions and savings.

(3)Regulations made under subsection (2)(b) may, in particular, include provision amending any enactment or any instrument made under an enactment.

371In section 156(4) (assets of Class 1)—

(a)omit “section 98 of the Taxes Act or”, and

(b)after “ITTOIA 2005” insert “or section 42 of CTA 2009”.

372After section 156 insert—

156ZAIntangible fixed assets: roll-over relief

(1)This section applies if a company is entitled to relief under Chapter 7 of Part 8 of CTA 2009 (roll-over relief in case of realisation and reinvestment) as a result of—

(a)section 898 of that Act (roll-over relief where pre-FA 2002 assets disposed of on or after 1 April 2002), or

(b)section 899 of that Act (roll-over relief where degrouping charge on pre-FA 2002 asset arises on or after 1 April 2002).

(2)The company is treated for the purposes of this Act as if the consideration for the disposal of the old asset were reduced by the amount available for relief.

(3)Subsection (2) does not affect the treatment for any purpose of the Taxes Acts of the other party to any transaction involved in the disposal of the old asset or the expenditure on other assets.

(4)In this section—

  • “the old asset” has the same meaning as in Chapter 7 of Part 8 of CTA 2009 (see section 754(2)), and

  • “the Taxes Acts” means the enactments relating to income tax, corporation tax or chargeable gains.

156ZBIntangible fixed assets: interaction with relief under Chapter 7 of Part 8 of CTA 2009

(1)This section applies if there is a disposal on or after 1 April 2002 of an asset that is both—

(a)an asset of a class specified in section 155, and

(b)an intangible fixed asset for the purposes of Part 8 of CTA 2009.

(2)The period specified in section 152(3)—

(a)does not include any period beginning on or after 1 April 2002, and

(b)may not be extended so as to include any such period.

(3)Classes 4 to 7A in section 155 do not apply for the purposes of corporation tax as respects the acquisition of new assets that are chargeable intangible assets for the purposes of Part 8 of CTA 2009 (see section 741 of that Act).

(4)In the case of an acquisition before 22 March 2005, subsection (3) applies as if it referred to Classes 4 to 7, instead of Classes 4 to 7A.

373In section 158(2) (activities other than trades, and interpretation) omit the words from “but” to the end.

374In section 161(3)(a) (appropriations to and from stock) for “under Case I of Schedule D” substitute “under Chapter 2 of Part 3 of CTA 2009 and the trade is carried on wholly or partly in the United Kingdom”.

375In section 170(9)(c) (interpretation of sections 171 to 181) omit “within the meaning of section 486 of the Taxes Act”.

376In section 171(3A) (transfers within a group: general provisions) for “section 91A of the Finance Act 1996” substitute “section 524 of CTA 2009”.

377Omit section 201(2) (relationship between section 201 of TCGA 1992 and section 119(1) of ICTA).

378For section 203(1) substitute—

(1)Sections 274 to 276 of CTA 2009 (meaning of “mineral royalties” etc) apply for the interpretation of this section and sections 201 and 202 as they apply for the interpretation of Chapter 7 of Part 4 of CTA 2009.

379(1)Amend section 210A (ring-fencing of losses) as follows.

(2)In subsection (10A)—

(a)for “Case I profits”, in both places where it occurs, substitute “life assurance trade profits”, and

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

(3)In subsection (11)(c) (ring-fencing of losses) for “paragraph 4(3) of Schedule 11 to the Finance Act 1996” substitute “section 389(1) of CTA 2009”.

380(1)Amend section 241 (furnished holiday lettings) as follows.

(2)In subsection (2), in the second sentence for “has the meaning given by section 504 of the Taxes Act” substitute “has the same meaning as it has for the purposes of Chapter 6 of Part 4 of CTA 2009”.

(3)In subsection (3)(a) omit “(within the meaning of the Income Tax Acts), or any Schedule A business (within the meaning of the Taxes Act),”.

381In section 251(8) (general provisions) omit—

(a)paragraph (a), and

(b)in paragraph (b) the words “(even apart from those provisions)”.

382In section 253(3) (relief for loans to traders) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of CTA 2009”.

383In section 275B (section 275A: supplementary provisions) for subsection (3) substitute—

(3)In section 275A—

  • “future” has the meaning given by section 581 of CTA 2009, and

  • “option” has the meaning given by section 580 of that Act.

384After section 286 insert—

286AResidence of companies

Chapter 3 of Part 2 of CTA 2009 (rules for determining residence of companies) applies for the purposes of—

(a)this Act (so far as relating to capital gains tax), and

(b)any other enactment relating to capital gains tax,

as it applies for the purposes of the Corporation Tax Acts.

385In section 288(1) (interpretation)—

(a)at the appropriate place insert—

“CTA 2009” means the Corporation Tax Act 2009;,

(b)for the definition of “personal representatives” substitute—

“personal representatives” has the same meaning as in Chapter 3 of Part 10 of CTA 2009 (see section 968 of that Act);,

(c)in the definition of “trading stock” for “section 100(2) of the Taxes Act” substitute “section 163 of CTA 2009”, and

(d)at the appropriate place insert—

“UK property business” means—

(a)a UK property business within the meaning of the Income Tax Acts (see section 989 of ITA 2007), or

(b)a UK property business within the meaning of the enactments relating to corporation tax (see section 834B of the Taxes Act);.

386In Schedule 7AC (exemptions for disposals by companies with substantial shareholding) omit paragraph 34(2).

387In Schedule 7D (approved share schemes and share incentives), in paragraph 2(4), for “paragraph 9 of Schedule 4AA to the Taxes Act” substitute “section 989 of CTA 2009”.

388(1)Amend Schedule 8 (leases) as follows.

(2)In paragraph 5—

(a)in sub-paragraph (1) for the words from “section 34” to “property business (within the meaning of that Act)” substitute “any of sections 277 to 281 of ITTOIA 2005 or sections 217 to 221 of CTA 2009 as a receipt of a UK property business”,

(b)in sub-paragraph (2) for the words from “section 34” to “property business (within the meaning of that Act)” substitute “any of sections 277 to 281 of ITTOIA 2005 or sections 217 to 221 of CTA 2009 as a receipt of a UK property business”,

(c)in sub-paragraph (3) for the words from “section 36” to “property business (within the meaning of that Act)” substitute “section 284 or 285 of ITTOIA 2005 or section 224 or 225 of CTA 2009 (sale of land with right to reconveyance or leaseback) as a receipt of a UK property business”, and

(d)in sub-paragraph (5) omit paragraph (a).

(3)In the italic cross-heading before paragraph 5 for “under Schedule A” substitute “as receipts of a property business”.

(4)In paragraph 6—

(a)in sub-paragraph (1) for the words from “If” to the end of paragraph (b) substitute “If under section 292 of ITTOIA 2005 or section 232 of CTA 2009 (allowance where, by the grant of a sublease, a lessee has converted a capital amount into a right to income) a person is to be treated as incurring expenses in consequence of having granted a sublease,”

(b)in sub-paragraph (2) for the words from “by virtue of section 35” to the end substitute “by virtue of section 282 of ITTOIA 2005 or section 222 of CTA 2009 (assignments for profit of lease granted at undervalue) as a receipt of a UK property business.”, and

(c)for sub-paragraph (3) substitute—

(3)If any adjustment is made—

(a)under section 301 or 302 of ITTOIA 2005, or

(b)under section 238 or 239 of CTA 2009,

on a claim made under that section, any necessary adjustment shall be made to give effect to the consequences of the claim on the operation of this paragraph or paragraph 5 above.

(5)In paragraph 7 for paragraphs (a) and (b) substitute—

(a)under section 277 of ITTOIA 2005 any amount is brought into account by virtue of section 278 of that Act as a receipt of a UK property business which is carried on by any person, or

(b)under section 217 of CTA 2009 any amount is brought into account by virtue of section 218 of that Act as a receipt of a UK property business which is carried on by any company,.

(6)In paragraph 7A omit “Schedule A business or”.

Finance (No. 2) Act 1992 (c. 48)

389The Finance (No. 2) Act 1992 is amended as follows.

390(1)Amend paragraph 3 of Schedule 12 (banks etc in compulsory liquidation) as follows.

(2)In sub-paragraph (1), omit the words from “(in” to “Schedule D)”.

(3)After that sub-paragraph insert—

(1A)So far as relating to corporation tax, the charge to tax under sub-paragraph (1) has effect as an application of the charge to corporation tax on income.

(4)In sub-paragraph (3)—

(a)omit “section 100 of the Taxes Act 1988 or”, and

(b)after “2005” insert “or section 162 of the Corporation Tax Act 2009”.

(5)In sub-paragraph (5) for the words from “section 80(5)” to the end substitute “section 464(1) of the Corporation Tax Act 2009 (matters to be brought into account in the case of loan relationships only under Part 5 of that Act)”.

(6)For the italic cross-heading before the paragraph substitute “Taxation of certain receipts”.

Finance Act 1994 (c. 9)

391The Finance Act 1994 is amended as follows.

392(1)Amend section 219 (Lloyd’s underwriters: taxation of profits) as follows.

(2)In subsection (2)—

(a)in paragraph (a) for “Case I of Schedule D” substitute “Part 3 of the Corporation Tax Act 2009”, and

(b)in paragraph (b) for the words from “under” to the end substitute “otherwise than under Part 3 of the Corporation Tax Act 2009”.

(3)In subsection (3)—

(a)for “Case I of Schedule D” substitute “Part 3 of the Corporation Tax Act 2009”, and

(b)for the words from “under any other” to the end substitute “otherwise than under Part 3 of that Act”.

(4)In subsection (4) for “section 11(2)(a) or 208 of the Taxes Act 1988” substitute “section 1285 of the Corporation Tax Act 2009 (exemption for UK company distributions)”.

(5)In subsection (4A)—

(a)for “208 of the Taxes Act 1988” substitute “1285 of the Corporation Tax Act 2009”, and

(b)in paragraph (b)—

(i)for “Case I of Schedule D” substitute “Part 3 of the Corporation Tax Act 2009”, and

(ii)for “(and not under any other Schedule or any other Case of Schedule D)” substitute “(and not under any other provision of the Corporation Tax Acts)”.

393In section 220(3) (accounting period in which certain profits or losses arise) for “section 72 of the Taxes Act 1988” substitute “section 52 of the Corporation Tax Act 2009”.

394In section 225(4) (stop-loss and quota share insurance) in the definition of “apportioned part” for “section 72 of the Taxes Act 1988” substitute “section 52 of the Corporation Tax Act 2009”.

395In section 226(3) (provisions which are not to apply) for “Schedule 26 to the Finance Act 2002” substitute “Part 7 of the Corporation Tax Act 2009”.

396In section 229(1)(ca) (regulations) for sub-paragraph (ii) substitute—

(ii)arrangements involving repos (within the meaning given by section 554(4) of the Corporation Tax Act 2009); or

(iii)arrangements meeting the conditions in section 554(2) of that Act (redemption arrangements);.

397Omit sections 249 and 250 (certain companies treated as non-resident).

398In paragraph 20(1) of Schedule 24 (provisions relating to the Railways Act 1993), in the words after paragraph (b) omit the words from “the trade” to “but”.

Finance Act 1995 (c. 4)

399The Finance Act 1995 is amended as follows.

400In section 126(7A) (UK representatives of non-residents) omit paragraph (b) and the “or” immediately before it.

401In section 127(1) (persons not treated as UK representatives)—

(a)in paragraph (ca)—

(i)for “Chapter 5 of Part 2” substitute “section 47(6) or (7), 47A(5), 48B(1) or 49A(2)”, and

(ii)for “the arrangements falling within that section” substitute “the alternative finance arrangements in question”, and

(b)omit paragraph (cb).

Finance Act 1996 (c. 8)

402The Finance Act 1996 is amended as follows.

403Omit section 80 (taxation of loan relationships).

404Omit section 81 (meaning of “loan relationship” etc).

405Omit section 82 (methods of bringing amounts into account).

406Omit section 83 (non-trading deficit on loan relationships).

407Omit section 84 (debits and credits brought into account).

408Omit section 84A (exchange gains and losses from loan relationships).

409Omit section 85A (computation in accordance with generally accepted accounting practice).

410Omit section 85B (amounts recognised in determining a company’s profit or loss).

411Omit section 85C (amounts not fully recognised for accounting purposes).

412Omit section 87 (accounting method where parties have a connection).

413Omit section 87A (meaning of “control” in section 87).

414Omit section 88 (exemption from section 87 in certain cases).

415Omit section 88A (accounting method where rate of interest is reset).

416Omit section 90A (change of accounting basis applicable to assets or liabilities).

417Omit section 91A (shares subject to outstanding third party obligations).

418Omit section 91B (non-qualifying shares).

419Omit section 91C (Condition 1 for section 91B(6)(b)).

420Omit section 91D (Condition 2 for section 91B(6)(b)).

421Omit section 91E (Condition 3 for section 91B(6)(b)).

422Omit section 91F (power to add, vary or remove Conditions for section 91B(6)(b)).

423Omit section 91G (shares beginning or ceasing to be subject to section 91A or 91B).

424Omit section 91H (payments in return for capital contribution).

425Omit section 91I (change of partnership shares).

426Omit section 93C (creditor relationships and benefit derived by connected persons).

427Omit section 94 (indexed gilt-edged securities).

428Omit section 94A (loan relationships with embedded derivatives).

429Omit section 94B (loan relationships treated differently by connected debtor and creditor).

430Omit section 95 (gilt strips).

431Omit section 96 (special rules for certain other gilts).

432Omit section 97 (manufactured interest).

433Omit section 98 (collective investment schemes).

434Omit section 99 (insurance companies).

435Omit section 100 (money debts etc not arising from the lending of money).

436Omit section 101 (financial instruments).

437Omit section 103 (interpretation of Chapter).

438In section 154 (FOTRA securities), omit subsections (2), (3), (5), (6) and (8).

439In section 203(9) (modification of the Agriculture Act 1993) for “Chapter II of Part IV of this Act” substitute “Part 5 of the Corporation Tax Act 2009 (loan relationships)”.

440Omit Schedule 8 (loan relationships: claims etc relating to deficits).

441Omit Schedule 9 (loan relationships: special computational provisions).

442Omit Schedule 10 (loan relationships: collective investment schemes).

443Omit Schedule 11 (loan relationships: special provisions for insurers).

444(1)Amend Schedule 15 (loan relationships: savings and transitional provisions) as follows.

(2)Omit—

(a)paragraph 2 (loan relationships terminated before 1st April 1996),

(b)paragraph 3 (basic rules for transitional accounting periods),

(c)paragraph 3A (adjustment of opening value where new accounting basis adopted as from an accounting period beginning on 1st April 1996), and

(d)paragraph 4 (application of accruals basis to pre-commencement relationships).

(3)In paragraph 5—

(a)in sub-paragraph (5) for “this Chapter is” substitute “this Chapter (as it had effect immediately before 1st April 2009) was”,

(b)in sub-paragraph (6)(b)—

(i)for “which is” substitute “which was”, and

(ii)after “this Chapter” insert “(as it had effect immediately before 1st April 2009)”, and

(c)in sub-paragraph (7)—

(i)for “taken to be” substitute “taken to have been”,

(ii)for “is treated” substitute “was treated”, and

(iii)after “paragraph 4 above” insert “(as it had effect immediately before 1st April 2009)”.

(4)In paragraph 6—

(a)in sub-paragraph (3) for “this Chapter” substitute “Part 5 of the Corporation Tax Act 2009”,

(b)for sub-paragraphs (4) to (7) substitute—

(4)Sub-paragraphs (1) to (3) above do not apply if the company duly made an election for the purposes of this sub-paragraph as it had effect on 30th September 1996., and

(c)in sub-paragraph (8)—

(i)for “section 82(2) of this Act” substitute “section 297 of the Corporation Tax Act 2009”, and

(ii)at the end insert “under Part 5 of that Act”.

(5)In paragraph 9—

(a)in sub-paragraph (1) after “this Chapter” insert “or Part 5 of the Corporation Tax Act 2009”, and

(b)in sub-paragraph (2)—

(i)after “this Chapter”, in the first place where it occurs, insert “or that Part”, and

(ii)after “this Chapter”, in the second place where it occurs, insert “or, as the case may be, that Part”.

(6)Omit paragraph 10 (adjustments of opening value for mark to market accounting in the case of chargeable assets).

(7)In paragraph 11 (other adjustments in the case of chargeable assets etc)—

(a)in sub-paragraphs (1) and (3)(a) for “this Chapter” substitute “Part 5 of the Corporation Tax Act 2009”,

(b)in sub-paragraph (6) at the end insert “under Part 5 of the Corporation Tax Act 2009”, and

(c)in sub-paragraph (8) after “this Chapter” insert “and Part 5 of the Corporation Tax Act 2009”.

(8)In paragraph 11A(2) (reduction of paragraph 11 credit where section 251(4) of 1992 Act prevents paragraph 8 loss) for “this Chapter” substitute “Part 5 of the Corporation Tax Act 2009”.

(9)In paragraph 12 (notional closing values of relevant assets)—

(a)in sub-paragraph (2) for “makes” substitute “made”, and

(b)in sub-paragraph (3)—

(i)for “is made” substitute “was made”, and

(ii)after “this Chapter” insert “and Part 5 of the Corporation Tax Act 2009”.

(10)Omit—

(a)paragraph 13 (further transitional rules where interest under loan relationships),

(b)paragraph 14 (transitional in respect of incidental expenses already allowed), and

(c)paragraph 15 (holdings of unit trusts etc).

(11)In paragraph 16 (bad debt relieved before commencement of FA 1996)—

(a)in sub-paragraph (2)—

(i)after “this Chapter”, in the first place where it occurs, insert “or Part 5 of the Corporation Tax Act 2009”, and

(ii)after “this Chapter”, in the second place where it occurs, insert “or that Part”,

(b)in sub-paragraph (3)—

(i)after “this Chapter”, in the first place where it occurs, insert “and Part 5 of the Corporation Tax Act 2009”, and

(ii)after “this Chapter”, in the second place where it occurs, insert “and that Part”, and

(c)in sub-paragraph (4) for “falls” substitute “fell”.

(12)In paragraph 17 (transitional for overseas sovereign debt etc)—

(a)in sub-paragraph (1) after “this Chapter” insert “and Part 5 of the Corporation Tax Act 2009”, and

(b)in sub-paragraph (3)—

(i)after “this Chapter”, in the first place where it occurs, insert “and Part 5 of the Corporation Tax Act 2009”, and

(ii)after “this Chapter”, in the second place where it occurs, insert “and that Part”.

(13)Omit paragraph 18 (transitional for accrued income scheme).

(14)In paragraph 19 (deep discount securities)—

(a)omit sub-paragraphs (1) and (2),

(b)in sub-paragraphs (3A), (4), (5), (6), (7) and (8) for “this Chapter” substitute “Part 5 of the Corporation Tax Act 2009”,

(c)omit sub-paragraph (10), and

(d)in sub-paragraph (11)(b) for “this Chapter is” substitute “this Chapter was”.

(15)In paragraph 20 (deep gain securities)—

(a)omit sub-paragraph (1),

(b)in sub-paragraphs (2A) and (3) for “this Chapter” substitute “Part 5 of the Corporation Tax Act 2009”, and

(c)in sub-paragraph (5) for “this Chapter is” substitute “this Chapter (as it had effect immediately before 1st April 2009) was”.

(16)In paragraph 21 (convertible securities)—

(a)omit sub-paragraph (1), and

(b)in sub-paragraphs (2) and (4) for “this Chapter” substitute “Part 5 of the Corporation Tax Act 2009”.

Broadcasting Act 1996 (c. 55)

445The Broadcasting Act 1996 is amended as follows.

446(1)Amend Schedule 7 (transfer schemes relating to BBC transmission networking: taxation provisions) as follows.

(2)In paragraph 11(2) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of the Corporation Tax Act 2009”.

(3)In paragraph 21—

(a)in sub-paragraph (1) for “Section 35 of the Taxes Act 1988 (charge on lease” substitute “Section 222 of the Corporation Tax Act 2009 (lease”,

(b)in sub-paragraph (2) for “Section 87 of the Taxes Act 1988 (taxable premiums)” substitute “Sections 62 to 67 of the Corporation Tax Act 2009 (tenants occupying land for purposes of trade treated as incurring expenses)” and for “that section to the amount chargeable” substitute “those sections to the taxed receipt”, and

(c)in sub-paragraph (3) for “Part II of the Taxes Act 1988” substitute “Part 4 of the Corporation Tax Act 2009 (see section 291 of that Act)”.

Finance Act 1997 (c. 16)

447The Finance Act 1997 is amended as follows.

448In Schedule 12 (leasing arrangements: finance leases and loans), in paragraph 11(11) for sub-paragraphs (a) and (b) substitute—

(a)section 165 or 168 of ITTOIA 2005 or section 142 or 145 of the Corporation Tax Act 2009 (preparation and restoration expenditure in relation to waste disposal site), or

(b)section 170 of ITTOIA 2005 or section 147 of the Corporation Tax Act 2009 (cemeteries etc),.

Finance (No. 2) Act 1997 (c. 58)

449The Finance (No. 2) Act 1997 is amended as follows.

450Omit section 40 (carry-back of loan relationship deficits).

Finance Act 1998 (c. 36)

451The Finance Act 1998 is amended as follows.

452Omit section 42 (computation of profits of trade, profession or vocation).

453In section 46 (minor and consequential provisions about computations) omit subsections (1) and (2).

454(1)Amend Schedule 18 (company tax returns, assessments and related matters) as follows.

(2)In paragraph 9(2) for “section 6(2) of the Taxes Act 1988” substitute “section 3 of the Corporation Tax Act 2009”.

(3)In paragraph 10—

(a)omit sub-paragraphs (2B) and (3), and

(b)in sub-paragraph (5)—

(i)for “section 32(7) of the Finance Act 2006” substitute “section 1182(7) of the Corporation Tax Act 2009”, and

(ii)for “section 32(8)(a)” substitute “section 1182(8)(a)”.

(4)In paragraph 13(3) in the definition of “trading stock” for “section 100(2) of the Taxes Act 1988” substitute “section 163 of the Corporation Tax Act 2009”.

(5)In paragraph 26(1)(b) for the words from “section 12(5A)” to “Board” substitute “section 11(3) of the Corporation Tax Act 2009 (power of officer of Revenue and Customs”.

(6)In paragraph 52—

(a)in sub-paragraph (2)—

(i)in paragraph (ba), for “Schedule 20 to the Finance Act 2000” substitute “Chapter 2 or 7 of Part 13 of the Corporation Tax Act 2009”,

(ii)in paragraph (bb), for “Schedule 22 to the Finance Act 2001” substitute “Part 14 of the Corporation Tax Act 2009”,

(iii)omit paragraph (bc), and

(iv)in paragraph (bd) after “credit” insert “under Part 15 of the Corporation Tax Act 2009”,

(b)omit sub-paragraph (4), and

(c)in sub-paragraph (5)—

(i)omit paragraph (ad), and

(ii)at the end, omit “, (ad)”.

(7)In paragraph 83A for “Schedule 20 to the Finance Act 2000” substitute “Part 13 of the Corporation Tax Act 2009”.

(8)In paragraph 83F(1)—

(a)in paragraph (a), after “tax credit” insert “under Chapter 2 or 7 of Part 13 of the Corporation Tax Act 2009”, and

(b)in paragraph (b), after “by it” insert “under that Chapter”.

(9)In paragraph 83G—

(a)in paragraph (a) for “paragraph 14 of Schedule 22 to the Finance Act 2001” substitute “section 1151 of the Corporation Tax Act 2009”, and

(b)in paragraph (b) for “paragraph 24 of that Schedule” substitute “section 1164 of that Act”.

(10)Omit Part 9BA.

(11)Omit Part 9C.

(12)Omit paragraph 84 and the italic cross-heading before it.

Finance Act 1999 (c. 16)

455The Finance Act 1999 is amended as follows.

456Omit section 54 (tax treatment of reverse premiums).

457Omit section 63 (treatment of transfer fees under existing contracts).

458(1)Amend section 81 (acquisitions disregarded under insurance companies concession) as follows.

(2)In subsection (4)—

(a)omit paragraph (a), and

(b)in paragraph (b) for “paragraph 6(4)(a)” substitute “paragraph 6(4)”.

(3)In subsection (8) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of the Corporation Tax Act 2009 (see section 302(5))”.

(4)In subsection (9)—

(a)for “section 473 of the Taxes Act 1988” substitute “section 129 of the Corporation Tax Act 2009”,

(b)for “the purposes of that Act” substitute “the purpose of calculating the profits of a company’s trade”, and

(c)for “paragraph 12(2) of Schedule 9 to the Finance Act 1996” and “Chapter II of Part IV of that Act of 1996” substitute “section 340(2) to (4) of the Corporation Tax Act 2009” and “Part 5 of that Act” respectively.

(5)In subsection (13) for “Schedule 22 to the Finance Act 2002” substitute “Chapter 14 of Part 3 of the Corporation Tax Act 2009”.

459Omit Schedule 6 (tax treatment of receipts by way of reverse premium).

Commonwealth Development Corporation Act 1999 (c. 20)

460The Commonwealth Development Corporation Act 1999 is amended as follows.

461(1)Amend paragraph 6 of Schedule 3 (tax) as follows.

(2)In sub-paragraph (2)—

(a)in paragraph (a) for “section 208 of the Income and Corporation Taxes Act 1988” substitute “section 1285 of the Corporation Tax Act 2009”, and

(b)in paragraph (b) for “that Act” substitute “the Income and Corporation Taxes Act 1988”.

(3)In sub-paragraph (3) for the words from “as income” to the end substitute “as dividends of a non-UK resident company chargeable under Chapter 2 of Part 10 of the Corporation Tax Act 2009.”

Finance Act 2000 (c. 17)

462The Finance Act 2000 is amended as follows.

463(1)Amend section 46 (exemption for small trades etc) as follows.

(2)For subsection (1)(b) substitute—

(b)from corporation tax chargeable—

(i)under Part 3 of the Corporation Tax Act 2009 in respect of a trade carried on wholly or partly in the United Kingdom, or

(ii)under or by virtue of any provision to which section 834A of the Taxes Act 1988 (miscellaneous charges) applies,.

(3)In subsection (2)(b) for “under Case VI of Schedule D” substitute “under or by virtue of any provision to which section 834A of the Taxes Act 1988 applies”.

(4)In subsection (2A)—

(a)for the words from “, 703” to “790” substitute “or 776”, and

(b)omit paragraph (b).

(5)In subsection (6), in the definition of “income”, for paragraph (b) substitute—

(b)any profits or gains or other income—

(i)which is chargeable to corporation tax under Part 3 of the Corporation Tax Act 2009 in respect of a trade carried on wholly or partly in the United Kingdom, or

(ii)which is chargeable to corporation tax under or by virtue of any provision to which section 834A of the Taxes Act 1988 applies,

and which (in either case) is not, apart from this section, exempted from corporation tax chargeable under or by virtue of that Part or provision.

464Omit section 50 (phasing out of relief for payments to trustees of profit sharing schemes).

465Omit section 69(1) (which introduces Schedule 20).

466Omit section 143(2) (power to provide incentives to use electronic communications).

467In Schedule 12 (provision of services through an intermediary) omit paragraphs 17 and 18.

468In Schedule 15 (the corporate venturing scheme) in paragraph 60(1) omit “under Case VI of Schedule D”.

469Omit Schedule 20 (tax relief for expenditure on research and development).

470(1)Amend Schedule 22 (tonnage tax) as follows.

(2)In paragraph 50(2)—

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

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

(3)For paragraph 51(3) and (4) substitute—

(3)For the purposes of this paragraph “income from investments” includes anything chargeable to tax under—

(a)Part 4 of the Corporation Tax Act 2009 (property income),

(b)section 299 of that Act (loan relationships: non-trading profits),

(c)Chapter 5 of Part 10 of that Act (distributions from unauthorised unit trusts), or

(d)Chapter 7 of that Part (annual payments not otherwise charged).

(4)In paragraph 61(6) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of the Corporation Tax Act 2009”.

(5)In paragraph 62(6) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of the Corporation Tax Act 2009”.

(6)In paragraph 63(2)—

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

(b)in paragraph (b) for “under Schedule 26 to the Finance Act 2002 (derivative contracts)” substitute “in accordance with Part 7 of the Corporation Tax Act 2009 (derivative contracts)”, and

(c)in paragraph (c) for “section 103(1A) of the Finance Act 1996” substitute “section 475 of the Corporation Tax Act 2009”.

Transport Act 2000 (c. 38)

471The Transport Act 2000 is amended as follows.

472(1)Amend Schedule 7 (transfer schemes: tax) as follows.

(2)In paragraph 12(5) for “section 100 of the 1988 Act” substitute “section 163 of the Corporation Tax Act 2009”.

(3)In paragraph 17—

(a)in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of the Corporation Tax Act 2009”, and

(b)in sub-paragraph (3) for “Chapter II of Part IV of the Finance Act 1996” and “that Chapter” substitute “Part 5 of the Corporation Tax Act 2009” and “that Part” respectively.

473(1)Amend Schedule 26 (transfers: tax) as follows.

(2)In paragraph 7—

(a)in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of the Corporation Tax Act 2009”, and

(b)in sub-paragraph (4) for “Chapter II of Part IV of the Finance Act 1996” and “that Chapter” substitute “Part 5 of the Corporation Tax Act 2009” and “that Part” respectively.

(3)For paragraph 13(1) substitute—

(1)Sub-paragraphs (2) to (4) apply if—

(a)the transferor ceased to carry on a trade by virtue of a relevant transfer taking effect, and

(b)on the taking effect of that transfer, the transferee began to carry on the trade.

This sub-paragraph is to be read with sub-paragraph (8).

(4)In paragraph 17—

(a)in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of the Corporation Tax Act 2009”, and

(b)in sub-paragraph (3) for “Chapter II of Part IV of the Finance Act 1996” and “that Chapter” substitute “Part 5 of the Corporation Tax Act 2009” and “that Part” respectively.

(5)In paragraph 29—

(a)in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act 1996” substitute “Part 5 of the Corporation Tax Act 2009”, and

(b)in sub-paragraph (3) for “Chapter II of Part IV of the Finance Act 1996” and “that Chapter” substitute “Part 5 of the Corporation Tax Act 2009” and “that Part” respectively.

(6)In paragraph 35—

(a)in sub-paragraph (1) for “paragraph 11 of Schedule 9 to the Finance Act 1996” substitute “section 444 of the Corporation Tax Act 2009”, and

(b)in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act 1996” and “that Chapter” substitute “Part 5 of the Corporation Tax Act 2009” and “that Part” respectively.

Capital Allowances Act 2001 (c. 2)

474The Capital Allowances Act 2001 is amended as follows.

475In section 2(4) (general means of giving effect to capital allowances) for “section 6 of ICTA” substitute “Part 2 of CTA 2009 (see section 2(2) of that Act)”.

476In section 15(1)(f) (qualifying activities) for “section 55(2) of ICTA” substitute “section 39(4) of CTA 2009”.

477In section 16 (ordinary property business) omit “, or a Schedule A business,”.

478(1)Amend section 17 (furnished holiday lettings) as follows.

(2)In subsection (1) omit “, or a Schedule A business,”.

(3)In subsection (3), in the second sentence for “has the meaning given by section 504 of ICTA” substitute “has the same meaning as it has for the purposes of Chapter 6 of Part 4 of CTA 2009 (see section 265)”.

479(1)Amend section 18 (managing investments of a company with investment business) as follows.

(2)In subsection (1) for “section 75 of ICTA” substitute “section 1219 of CTA 2009”.

(3)In subsection (2) for “section 130 of ICTA” substitute “section 1218 of CTA 2009”.

480In section 28(2B)(a) (thermal insulation of buildings) for “section 31ZA of ICTA” substitute “section 251 of CTA 2009”.

481In section 38 (production animals etc) for paragraphs (a) and (b) substitute—

(a)animals or other creatures to which section 30 of ITTOIA 2005 or section 50 of CTA 2009 (animals kept for trade purposes) applies,

(b)animals or other creatures to which Chapter 8 of Part 2 of ITTOIA 2005 or Chapter 8 of Part 3 of CTA 2009 (herd basis rules) applies, or

(c)shares in animals or creatures such as are mentioned in paragraph (a) or (b).

482(1)Amend section 63 (cases in which disposal value is nil) as follows.

(2)In subsection (2)(c) for “section 84 of ICTA” substitute “section 106 of CTA 2009”.

(3)In subsection (4) for “sections 83A(4) and 84(4) of ICTA” substitute “section 108 of CTA 2009”.

483In section 105(3)(a) (“profits chargeable to tax”) for “section 830(4) of ICTA” substitute “section 1313(2) of CTA 2009”.

484(1)Amend section 106 (the designated period) as follows.

(2)In subsection (3)(b) for the words from “each of which” to the end substitute “each of which there was a change in the persons carrying on the qualifying activity in relation to which Condition A or Condition B was met.”

(3)After subsection (3) insert—

(3A)Condition A is that—

(a)at least one person who carried on the qualifying activity immediately before or immediately after the change was within the charge to income tax in respect of that activity, and

(b)at least one person who carried on the qualifying activity before the change continued to carry it on after the change.

(3B)Condition B is that—

(a)the qualifying activity was carried on in partnership both immediately before and immediately after the change,

(b)a company that was within the charge to corporation tax in respect of the activity carried it on immediately before or immediately after the change, and

(c)at least one company which carried the activity on before the change continued to carry it on after the change.

485(1)Amend section 108 (effect of disposal to connected person on overseas leasing pool) as follows.

(2)In subsection (1)(b) for the words from “is one” to “reconstructions)” substitute does not occur on the occasion of a change in the persons carrying on the qualifying activity—

(i)which falls within section 343(1) of ICTA (company reconstructions without change of ownership), or

(ii)in relation to which Condition A or Condition B is met.

(3)After subsection (1) insert—

(1A)Condition A is that—

(a)at least one person who carried on the qualifying activity immediately before or immediately after the change was within the charge to income tax in respect of that activity, and

(b)at least one person who carried on the qualifying activity before the change continued to carry it on after the change.

(1B)Condition B is that—

(a)the qualifying activity was carried on in partnership both immediately before and immediately after the change,

(b)a company that was within the charge to corporation tax in respect of the activity carried it on immediately before or immediately after the change, and

(c)at least one company which carried the activity on before the change continued to carry it on after the change.

486(1)Amend section 112 (excess allowances: connected persons) as follows.

(2)In subsection (1) for paragraph (b) and the “and” immediately after that paragraph substitute—

(b)the transaction was not effected (or, if more than one, none of the transactions was effected) on the occasion of a change in the persons carrying on the qualifying activity—

(i)which falls within section 343(1) of ICTA (company reconstructions without change of ownership), or

(ii)in relation to which Condition A or Condition B is met, and.

(3)After subsection (1) insert—

(1A)Condition A is that—

(a)at least one person who carried on the qualifying activity immediately before or immediately after the change was within the charge to income tax in respect of that activity, and

(b)at least one person who carried on the qualifying activity before the change continued to carry it on after the change.

(1B)Condition B is that—

(a)the qualifying activity was carried on in partnership both immediately before and immediately after the change,

(b)a company that was within the charge to corporation tax in respect of the activity carried it on immediately before or immediately after the change, and

(c)at least one company which carried the activity on before the change continued to carry it on after the change.

487(1)Amend section 115 (prohibited allowances: connected persons) as follows.

(2)In subsection (1) for paragraph (c) and the “and” immediately after that paragraph substitute—

(c)the transaction was not effected (or, if more than one, none of the transactions was effected) on the occasion of a change in the persons carrying on the qualifying activity—

(i)which falls within section 343(1) of ICTA (company reconstructions without change of ownership), or

(ii)in relation to which Condition A or Condition B is met, and.

(3)After subsection (1) insert—

(1A)Condition A is that—

(a)at least one person who carried on the qualifying activity immediately before or immediately after the change was within the charge to income tax in respect of that activity, and

(b)at least one person who carried on the qualifying activity before the change continued to carry it on after the change.

(1B)Condition B is that—

(a)the qualifying activity was carried on in partnership both immediately before and immediately after the change,

(b)a company that was within the charge to corporation tax in respect of the activity carried it on immediately before or immediately after the change, and

(c)at least one company which carried the activity on before the change continued to carry it on after the change.

488(1)Amend section 122 (short-term leasing by buyer, lessee, etc) as follows.

(2)In subsection (2)(c) for the words from “on the occasion of each of which” to the end substitute “on the occasion of each of which there was a change in the persons carrying on the qualifying activity in relation to which Condition A or B was met.”

(3)After subsection (2) insert—

(2A)Condition A is that—

(a)at least one person who carried on the qualifying activity immediately before or immediately after the change was within the charge to income tax in respect of that activity, and

(b)at least one person who carried on the qualifying activity before the change continued to carry it on after the change.

(2B)Condition B is that—

(a)the qualifying activity was carried on in partnership both immediately before and immediately after the change,

(b)a company that was within the charge to corporation tax in respect of the activity carried it on immediately before or immediately after the change, and

(c)at least one company which carried the activity on before the change continued to carry it on after the change.

489(1)Amend section 125 (other qualifying purposes) as follows.

(2)In subsection (3)(c) for the words from “on the occasion of each of which” to the end substitute “on the occasion of each of which there was a change in the persons carrying on the qualifying activity in relation to which Condition A or B was met.”

(3)After subsection (3) insert—

(3A)Condition A is that—

(a)at least one person who carried on the qualifying activity immediately before or immediately after the change was within the charge to income tax in respect of that activity, and

(b)at least one person who carried on the qualifying activity before the change continued to carry it on after the change.

(3B)Condition B is that—

(a)the qualifying activity was carried on in partnership both immediately before and immediately after the change,

(b)a company which was within the charge to corporation tax in respect of the activity carried it on immediately before or immediately after the change, and

(c)at least one company which carried the activity on before the change continued to carry it on after the change.

490In section 252 (mines, transport undertakings etc) for “section 55(2) of ICTA” substitute “section 39(4) of CTA 2009”.

491(1)Amend section 253 (companies with investment business) as follows.

(2)In subsection (2) for “section 75(4) of ICTA” substitute “section 1233 of CTA 2009”.

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

(4)In subsection (6) for “section 75(4) of ICTA” substitute “section 1233 of CTA 2009”.

492(1)Amend section 256 (different giving effect rules for different categories of business) as follows.

(2)In subsection (2)(b) for the words from “amount” to the end substitute “company as receiving for the chargeable period in question an amount which is equal to the amount of the charges (or parts of charges) and to which the charge to corporation tax on income applies”.

(3)In subsection (4) for “under Case VI of Schedule D” substitute “chargeable under section 436A of ICTA”.

493In section 257(2)(a) (supplementary) for “Case I” substitute “life assurance trade”.

494In section 260(8) (special leasing: corporation tax (excess allowance)) for “section 6 of ICTA (charge to corporation tax etc)” substitute “Part 2 of CTA 2009 (see section 2(2) of that Act)”.

495(1)Amend section 263 (qualifying activities carried on in partnership) as follows.

(2)For subsection (1)(c) substitute—

(c)if the qualifying activity is a trade or property business, the condition in subsection (1A) or (1B) (whichever is appropriate) is met.

(3)For subsection (1A) substitute—

(1A)For income tax purposes, the condition is that a person carrying on the trade or property business immediately before the change continues to carry it on after the change.

(1B)For corporation tax purposes, the condition is that a company carrying on the trade or property business in partnership immediately before the change continues to carry it on in partnership after the change.

496(1)Amend section 265 (successions: general) as follows.

(2)For subsection (1)(b) substitute—

(b)if the qualifying activity is a trade or property business, the condition in subsection (1A) or (1B) (whichever is appropriate) is met.

(3)For subsection (1A) substitute—

(1A)For income tax purposes, the condition is that no person carrying on the trade or property business immediately before the succession continues to carry it on after the succession.

(1B)For corporation tax purposes, the condition is that no company carrying on the trade or property business in partnership immediately before the succession continues to carry it on in partnership after the succession.

497In section 282 (buildings outside the United Kingdom) for the words from “or that apply” to the end substitute “or corporation tax purposes.”

498In section 291(3)(a) (supplementary provisions with respect to elections) for “section 38(1) to (4) and (6) of ICTA,” substitute “sections 243 and 244 of CTA 2009,”.

499In section 326(1) (interpretation of section 325), in the definition of “premium” for paragraph (a) and the “or” immediately after it substitute—

(a)an amount brought into account as a receipt in calculating the profits of a property business under sections 217 to 221 of CTA 2009 that is calculated by reference to the sum, or.

500In section 331(1)(b) (meaning of “capital value”) for sub-paragraph (i) and the “or” immediately after it substitute—

(i)an amount brought into account as a receipt in calculating the profits of a property business under sections 217 to 221 of CTA 2009 that is calculated by reference to the sum, or.

501(1)Amend section 353 (lessors and licensors) as follows.

(2)In subsection (2) omit “, or a Schedule A business,”.

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

502(1)Amend section 354 (buildings temporarily out of use) as follows.

(2)In subsection (3), in the words after paragraph (b)—

(a)for “section 105 of ICTA” substitute “section 196 of CTA 2009”, and

(b)for “section 103 or 104(1) of ICTA” substitute “Chapter 15 of Part 3 of CTA 2009”.

(3)In subsection (5) for “section 18 of ITTOIA 2005 or section 337(1) of ICTA” substitute “section 577(2A) of this Act or section 18 of ITTOIA 2005”.

503In section 390(1) (interpretation of section 389), in the definition of “premium” for paragraph (a) and the “or” immediately after it substitute—

(a)an amount brought into account as a receipt in calculating the profits of a UK property business under sections 217 to 221 of CTA 2009 that is calculated by reference to the sum, or.

504(1)Amend section 392 (UK property business and Schedule A business) as follows.

(2)In subsection (2) omit “, or a Schedule A business,”.

(3)In subsection (2A)—

(a)omit the words from “is within” to “and he”, and

(b)for “treating him as if he had been carrying on” substitute “treating the person as having carried on”.

(4)Omit subsection (3).

(5)For the title substitute “UK property businesses”.

505In section 393B(4) (meaning of “qualifying expenditure”) omit “or Schedule A business”.

506In section 393J(3)(a) (entitlement to writing-down allowances) for “section 38(1) to (4) and (6) of ICTA,” substitute “sections 243 and 244 of CTA 2009,”.

507(1)Amend section 393T (giving effect to allowances and charges) as follows.

(2)In subsection (2) omit “, or a Schedule A business,”.

(3)In subsection (2A)—

(a)for the words from “person” to “his” substitute “person's”,

(b)for “by him” substitute “by the person”, and

(c)for “treating him as if he had been carrying on” substitute “treating the person as having carried on”.

(4)Omit subsection (3).

508(1)Amend section 406 (reduction where premium relief previously allowed) as follows.

(2)In subsection (1)(b) for “sections 87 and 87A of ICTA” substitute “sections 62 to 67 of CTA 2009”.

(3)In subsection (2) for “sections 87 and 87A of ICTA” substitute “sections 62 to 67 of CTA 2009”.

509In section 454(1)(c) (qualifying expenditure) for “section 531(3)(a) of ICTA” substitute “section 178 of CTA 2009”.

510In section 455(4) (excluded expenditure) for “section 531(2) of ICTA” substitute “section 178(3) of CTA 2009”.

511In section 462(3) (disposal values) for “section 531(2) of ICTA” substitute “section 178(2) of CTA 2009”.

512In section 481(5)(b) (anti-avoidance: limit on qualifying expenditure) for “section 524 of ICTA” substitute “section 912 of CTA 2009”.

513In section 483(c) (meaning of “income from patents”) for “section 524 or 525 of ICTA” substitute “section 912 or 918 of CTA 2009”.

514In section 488(3)(a) (balancing allowances) for “section 18 of ITTOIA or section 337(1) of ICTA” substitute “section 577(2A) of this Act or section 18 of ITTOIA 2005”.

515(1)Amend section 529 (giving effect to allowances and charges) as follows.

(2)In subsection (1) omit “, or a Schedule A business,”.

(3)In subsection (1A)—

(a)omit the words from “is within” to “and he”, and

(b)for “treating him as if he had been carrying on” substitute “treating the person as having carried on”.

(4)Omit subsection (2).

516In section 536(5)(a)(v) (contributions not made by public bodies and not eligible for tax relief) for “section 55(2) of ICTA” substitute “section 39(5) of CTA 2009”.

517In section 545(4) (investment assets) for “Case I of Schedule D” substitute “section 35 of CTA 2009 (charge on trade profits)”.

518(1)Amend section 558 (effect of partnership changes) as follows.

(2)For subsection (1)(c) substitute—

(c)the condition in subsection (1A) or (1B) (whichever is appropriate) is met.

(3)After subsection (1) insert—

(1A)For income tax purposes, the condition is that a person carrying on the relevant activity immediately before the change continues to carry it on after the change.

(1B)For corporation tax purposes, the condition is that a company carrying on the relevant activity in partnership immediately before the change continues to carry it on in partnership after the change.

519(1)Amend section 559 (effect of successions) as follows.

(2)For subsection (1)(b) substitute—

(b)the condition in subsection (1A) or (1B) (whichever is appropriate) is met.

(3)For subsection (1A) substitute—

(1A)For income tax purposes, the condition is that no person carrying on the relevant activity immediately before the succession continues to carry it on after the succession.

(1B)For corporation tax purposes, the condition is that no company carrying on the relevant activity in partnership immediately before the succession continues to carry it on in partnership after the succession.

520(1)Amend section 577 (other definitions) as follows.

(2)In subsection (1), in the definition of “property business” omit “, a Schedule A business”.

(3)After subsection (2) insert—

(2A)A person’s ceasing to carry on a trade, property business, profession or vocation is treated for the purposes of this Act as the permanent discontinuance of the trade, property business, profession or vocation, whether or not it is in fact discontinued.

(2B)For income tax purposes, a change in the persons carrying on a trade, property business, profession or vocation is not treated as the permanent discontinuance of the trade, property business, profession or vocation if a person carrying it on immediately before the change continues to carry it on after the change.

(2C)For corporation tax purposes, a change in the persons carrying on a trade or property business is not treated as the permanent discontinuance of the trade or property business if a company carrying it on in partnership immediately before the change continues to carry it on in partnership after the change.

521(1)Amend Schedule A1 (first-year tax credits) as follows.

(2)In paragraph 5—

(a)in sub-paragraph (1) for “Schedule A business” substitute “UK property business”, and

(b)in sub-paragraph (2) for “(Schedule A losses)” substitute “(UK property business losses)”.

(3)In paragraph 7—

(a)in sub-paragraph (1)(a) for “Schedule A business” substitute “UK property business”, and

(b)in sub-paragraph (3) for “Schedule A business” substitute “UK property business”.

(4)In paragraph 8(2) for paragraph (a) substitute—

(a)the sum of the amounts mentioned in section 1223(2) of CTA 2009, exceeds.

(5)In paragraph 11(4) for paragraphs (a) to (d) substitute—

(a)Chapter 2 or 7 of Part 13 of CTA 2009 (tax credits for expenditure on research and development or vaccine research etc),

(b)Chapter 3 of Part 14 of that Act (tax credits for remediation of contaminated land), and

(c)Chapter 3 of Part 15 of that Act (film tax credits).

(6)In paragraph 12—

(a)in sub-paragraph (1) for “Schedule A business” substitute “UK property business”, and

(b)in sub-paragraph (2)(c) for “Part 3 of Schedule 22 to FA 2001” substitute “Chapter 3 of Part 14 of CTA 2009”.

(7)In paragraph 14—

(a)in sub-paragraph (1)(a) for “Schedule A business” substitute “UK property business”,

(b)in sub-paragraph (4)(a) for “Part 3 of Schedule 22 to FA 2001” substitute “Chapter 3 of Part 14 of CTA 2009”, and

(c)in sub-paragraph (6)(b) for “paragraph 4(4) of Schedule 11 to FA 1996” substitute “section 391(3)(b) of CTA 2009”.

(8)In paragraph 15(3) for “section 75(9) of that Act” substitute “section 1223 of CTA 2009”.

(9)In paragraph 16—

(a)in sub-paragraph (2)(a) for “Part 4 of Schedule 22 to FA 2001” substitute “Chapter 4 of Part 14 of CTA 2009”, and

(b)in sub-paragraph (3)(b) for “paragraph 4(4) of Schedule 11 to FA 1996” substitute “section 391(3)(b) of CTA 2009”.

(10)In paragraph 20—

(a)in sub-paragraph (b) for “section 75(9) of that Act (relief of expenses and charges against future profits)” substitute “section 1223 of CTA 2009 (carrying expenses forward)”,

(b)in sub-paragraph (c)—

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

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

(iii)for “that Act” substitute “ICTA”, and

(c)in sub-paragraph (d) for “that Act” substitute “ICTA”.

(11)In paragraph 21(1) for “Schedule A business” substitute “UK property business”.

522(1)Amend Schedule 1 (abbreviations and defined expressions) as follows.

(2)In Part 1 at the end insert—

CTA 2009The Corporation Tax Act 2009

(3)In Part 2—

(a)in the entry for “accounting period”, in the second column, for “section 12 of ICTA” substitute “Chapter 2 of Part 2 of CTA 2009”,

(b)after the entry for “car (in Part 2)” insert—

the charge to corporation tax on incomesection 2(3) of CTA 2009 (as applied by section 834(1) of ICTA),

(c)in the entry for “overseas property business”, for the words in the second column substitute “Chapter 2 of Part 3 of ITTOIA 2005 (as applied by section 989 of ITA 2007) and Chapter 2 of Part 4 of CTA 2009 (as applied by section 834B of ICTA)”,

(d)omit the entry for “Schedule A business”, and

(e)in the entry for “UK property business”, in the second column, at the end insert “and Chapter 2 of Part 4 of CTA 2009 (as applied by section 834B of ICTA)”.

Finance Act 2001 (c. 9)

523The Finance Act 2001 is amended as follows.

524Omit section 70(1) and (2) (which introduces Schedule 22).

525Omit Schedule 22 (remediation of contaminated land).

Finance Act 2002 (c. 23)

526The Finance Act 2002 is amended as follows.

527Omit section 53 (which introduces Schedule 12 to that Act).

528Omit section 54 (which introduces Schedules 13 and 14 to that Act).

529Omit section 55 (gifts of medical supplies and equipment).

530Omit section 64 (adjustment on change of basis).

531(1)Amend section 65 (postponement of change to mark to market in certain cases) as follows.

(2)In subsection (1) for “of Case I of Schedule D” substitute “applicable for the purposes of section 35 of the Corporation Tax Act 2009 (charge on trade profits)”.

(3)In subsection (2)(b) for “section 42 of the Finance Act 1998 (c. 36)” substitute “section 46 of the Corporation Tax Act 2009”.

532Omit section 71 (accounting method where rate of interest etc is reset).

533In section 81(3)(b) (transitional provision) for “Chapter 2 of Part 4 of the Finance Act 1996” substitute “Part 5 of the Corporation Tax Act 2009”.

534In section 83 (derivative contracts) omit subsections (1)(a) and (2).

535Omit section 84(1) (gains and losses from intangible fixed assets of company).

536Omit Schedule 12 (tax relief for expenditure on research and development).

537Omit Schedule 13 (tax relief for expenditure on vaccine research etc).

538In Schedule 16 (community investment tax relief) in paragraph 27(4) omit “under Case VI of Schedule D”.

539(1)Amend Schedule 18 (relief for community amateur sports clubs) as follows.

(2)In paragraph 4(4) for the words from “means” to the end substitute means profits that (apart from this paragraph) are chargeable under Chapter 2 of Part 3 of CTA 2009 and are—

(a)profits of a trade carried on wholly or partly in the United Kingdom, or

(b)profits of an activity other than a trade.

(3)In paragraph 5(3)(a) for the words from “on” to the end substitute “which (apart from this paragraph) would be required to be brought into account under Part 5 of the Corporation Tax Act 2009 (loan relationships) as a non-trading credit of the club;”.

(4)Omit paragraph 9(3)(a).

540Omit Schedule 22 (computation of profits: adjustment on change of basis).

541(1)Amend Schedule 23 (exchange gains and losses from loan relationships etc) as follows.

(2)Omit paragraph 25 (anti-avoidance: change of accounting period).

(3)In paragraph 26 (deferred foreign exchange gains)—

(a)in sub-paragraph (2)—

(i)in paragraph (a) for “Chapter 2 of Part 4 of the Finance Act 1996 (c. 8)” substitute “Part 5 of the Corporation Tax Act 2009”,

(ii)in paragraph (b) for “that Chapter” substitute “that Part”, and

(iii)in paragraph (c) for “section 82(2) of the Finance Act 1996” substitute “section 297(2) of the Corporation Tax Act 2009”, and

(b)in sub-paragraph (5) for “subsection (8) of section 84A of the Finance Act 1996” and “subsection (9)” substitute “section 328(5) of the Corporation Tax Act 2009” and “subsection (6)” respectively.

542In Schedule 25 (loan relationships) omit paragraphs 61 to 64.

543Omit Schedule 26 (derivative contracts).

544(1)Schedule 28 (derivative contracts: transitional provisions etc) is amended as follows.

(2)Omit paragraph 1 (anti-avoidance: change of accounting period).

(3)After paragraph 2(4) (qualifying contracts to which company ceases to be party before commencement day) insert—

(4A)In relation to a subsequent accounting period ending on or after 1 April 2009, the reference in sub-paragraph (4) to Schedule 26 is to be read as a reference to Part 7 of the Corporation Tax Act 2009.

(4)Omit paragraph 3 (qualifying contracts which become derivative contracts).

(5)After paragraph 4(7) (contracts which became derivative contracts: chargeable assets) insert—

(7A)In relation to an accounting period ending on or after 1 April 2009, the reference in sub-paragraph (7) to Chapter 2 of Part 4 of the Finance Act 1996 is to be read as a reference to Part 5 of the Corporation Tax Act 2009.

(6)After paragraph 5(9) (contracts: election to treat as two assets) insert—

(9A)In relation to an accounting period ending on or after 1 April 2009, the reference in sub-paragraph (9) to Chapter 2 of Part 4 of the Finance Act 1996 is to be read as a reference to Part 5 of the Corporation Tax Act 2009.

(7)After paragraph 6(8) (contracts which become derivative contracts: contracts within Schedule 5AA to ICTA) insert—

(8A)In relation to an accounting period ending on or after 1 April 2009—

(a)the reference in sub-paragraph (7) to paragraph 14(3) of Schedule 26 is to be read as a reference to section 574 of the Corporation Tax Act 2009,

(b)the reference in that sub-paragraph to Chapter 2 of Part 4 of the Finance Act 1996 is to be read as a reference to Part 5 of the Corporation Tax Act 2009, and

(c)the references in sub-paragraph (8) to Schedule 26 are to be read as references to Part 7 of the Corporation Tax Act 2009.

545Omit Schedule 29 (gains and losses of a company from intangible fixed assets).

Proceeds of Crime Act 2002 (c. 29)

546The Proceeds of Crime Act 2002 is amended as follows.

547(1)Amend Schedule 10 (tax) as follows.

(2)In paragraph 9—

(a)in sub-paragraph (1) for “section 84” to “that Act)” substitute “Part 5 of the Corporation Tax Act 2009 (loan relationships)”, and

(b)in sub-paragraph (2) for the words “that Chapter” substitute “that Part”.

(3)In paragraph 11—

(a)in sub-paragraph (3) for the words from “section 100” to the end substitute “section 173 of ITTOIA 2005 or section 162 of the Corporation Tax Act 2009 (valuation of trading stock on cessation).”, and

(b)in sub-paragraph (4) for the words from “section 100” to the end substitute “section 174 of ITTOIA 2005 or (as the case may be) section 163 of the Corporation Tax Act 2009.”

Income Tax (Earnings and Pensions) Act 2003 (c. 1)

548The Income Tax (Earnings and Pensions) Act 2003 is amended as follows.

549In section 61(1) (interpretation) in the definition of “business” for “or Schedule A business” substitute “within the meaning of Chapter 2 of Part 3 of ITTOIA 2005 or Chapter 2 of Part 4 of CTA 2009”.

550In section 178(d) (exception for loans where interest qualifies for tax relief) for “, or a Schedule A business,” substitute “(within the meaning of Chapter 2 of Part 3 of ITTOIA 2005 or Chapter 2 of Part 4 of CTA 2009)”.

551In section 180(5)(d) (threshold for benefit of loan to be treated as earnings) for “, or a Schedule A business,” substitute “(within the meaning of Chapter 2 of Part 3 of ITTOIA 2005 or Chapter 2 of Part 4 of CTA 2009)”.

552(1)Amend section 357 (business entertainment and gifts: exception where employer’s expenses disallowed) as follows.

(2)In subsection (2) for “section 577 of ICTA” substitute “section 1298 of CTA 2009”.

(3)In subsection (3) for “that section” substitute “section 1298 of CTA 2009”.

553In section 420(1)(h) (meaning of securities etc) at the end insert “or section 507 of CTA 2009 (investment bond arrangements)”.

554(1)Amend section 515 (which refers to other provisions which deal with share incentive plans) as follows.

(2)Omit subsection (1).

(3)In subsection (2)—

(a)omit the “and” immediately after paragraph (c), and

(b)after paragraph (d) insert , and

(e)Chapter 1 of Part 11 of CTA 2009 (share incentive plans).

555In section 702(5B) (which sets out what shares are corporation tax deductible) for “Schedule 23 to the Finance Act 2003” substitute “Part 12 of CTA 2009”.

556In Schedule 1 (abbreviations and defined expressions)—

(a)in Part 1 at the end insert—

CTA 2009The Corporation Tax Act 2009, and

(b)in Part 2 omit the entries for “Schedule A business” and “UK property business”.

557In Schedule 2 (approved share incentive plans), in paragraph 85(1)(c), for “paragraph 11 of Schedule 4AA to ICTA” substitute “section 998 of CTA 2009”.

Finance Act 2003 (c. 14)

558The Finance Act 2003 is amended as follows.

559Omit section 141 (corporation tax for employee share acquisitions).

560Omit section 143 (restriction of deductions for employee benefit contributions).

561In section 148 (meaning of “permanent establishment”)—

(a)in subsection (5A)—

(i)for “as defined by Chapter 5 of Part 2 of the Finance Act 2005” substitute “within section 47(6) or (7), 47A(5), 48B(1) or 49A(2) of the Finance Act 2005 or section 511, 512 or 513(2) or (3) of the Corporation Tax Act 2009”, and

(ii)for “the arrangements falling within that section” substitute “the alternative finance arrangements in question”, and

(b)omit subsection (5B).

562(1)Amend section 150 (non-resident companies: assessment, collection and recovery of corporation tax) as follows.

(2)In subsection (2) for “section 11(2A) of the Taxes Act 1988” substitute “section 19 of the Corporation Tax Act 2009”.

(3)In subsection (7) omit the words from “; and” to the end.

(4)After subsection (7) insert—

(7A)In this section references to carrying on a trade include holding an office.

563In section 152(2) (non-resident companies: transactions carried out through broker, investment manager or Lloyd’s agent) for “section 11AA of the Taxes Act 1988” substitute “Chapter 4 of Part 2 of the Corporation Tax Act 2009”.

564After section 177(4) (currency contracts and currency options) insert—

(4A)In relation to a subsequent accounting period ending on or after 1 April 2009, the reference in subsection (4)(c) to Schedule 26 is to be read as a reference to Part 7 of the Corporation Tax Act 2009.

565In section 195(9)(b) (companies acquiring their own shares) for the words from “in accordance with” to the end substitute “under Chapter 2 of Part 3 of the Corporation Tax Act 2009”.

566Omit Schedule 23 (corporation tax relief for employee share acquisitions).

567Omit Schedule 24 (restriction of deductions for employee benefit contributions).

568In paragraph 5A(2) of Schedule 26 (non-resident companies: transactions through broker, investment manager or Lloyd’s agent) for “section 11AA of the Taxes Act 1988” substitute “Chapter 4 of Part 2 of the Corporation Tax Act 2009”.

Finance Act 2004 (c. 12)

569The Finance Act 2004 is amended as follows.

570In section 71 (collection and recovery of sums to be deducted) omit subsection (3)(b) and the “and” immediately before it.

571In section 83(4) (giving through the self-assessment return)—

(a)after “section 505(1)(c)(ii)” insert “or (iiza) or, so far as relating to annual payments from a source in the United Kingdom, (iizb)”, and

(b)for “Case III of Schedule D” substitute “section 299 of the Corporation Tax Act 2009 or Chapter 5 or 7 of Part 10 of that Act”.

572(1)Amend section 131 (companies in partnership) as follows.

(2)In subsection (4) for the words from “annual” to the end substitute an amount—

“(a)which is equal to the chargeable amount, and

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

(3)In subsection (10) for “section 91H or 91I of the Finance Act 1996” substitute “Chapter 8 of Part 6 of the Corporation Tax Act 2009 (returns from partnerships)”.

573(1)Amend section 196 (relief for employers in respect of contributions paid) as follows.

(2)In subsection (2) for “(trading income) or Case I or II of Schedule D” substitute “or Part 3 of CTA 2009 (trading income)”.

(3)In subsection (3) for “section 75 of ICTA” substitute “Chapter 2 of Part 16 of CTA 2009”.

574In section 196A(4) (power to restrict relief)—

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

(b)in paragraph (b) for “section 75 of ICTA” substitute “section 1219 of CTA 2009”.

575In section 197(10) (spreading of relief)—

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

(b)in paragraph (b) for the words from “section 75” to the end substitute “section 76 of ICTA (expenses of insurance companies) or Chapter 2 of Part 16 of CTA 2009 (expenses of management: companies with investment business), an accounting period.”

576In section 199A(10) (indirect contributions)—

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

(b)in paragraph (b) for “section 75 of ICTA” substitute “Chapter 2 of Part 16 of CTA 2009”.

577In section 200 (no other relief for employers in respect of contributions)—

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

(b)in paragraph (b) for “section 75 of ICTA” substitute “Chapter 2 of Part 16 of CTA 2009”.

578(1)Amend section 246 (restriction of deduction for non-contributory provision) as follows.

(2)In subsection (2)—

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

(b)in paragraph (b) for “section 75 of ICTA” substitute “Chapter 2 of Part 16 of CTA 2009”.

(3)In subsection (3)—

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

(b)in paragraph (b) for “of section 75 or 76 of ICTA in relation to the employer,” substitute “in relation to the employer of section 76 of ICTA or Chapter 2 of Part 16 of CTA 2009,”.

579In section 246A(4) (case where no relief for provision by an employer)—

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

(b)in paragraph (b) for “section 75 of ICTA” substitute “Chapter 2 of Part 16 of CTA 2009”.

580In section 280(1) (abbreviations and general index)—

(a)omit the “and” immediately after the entry for “ITTOIA 2005”, and

(b)after the entry for “ITA 2007” insert , and

“CTA 2009” means the Corporation Tax Act 2009.

581(1)Amend Schedule 26 (offshore funds) as follows.

(2)In paragraph 1(6) for “Chapter 2 of Part 4 of the Finance Act 1996” substitute “Part 5 of the Corporation Tax Act 2009”.

(3)In paragraph 2(6) in the definition of “derivative contract” for “Schedule 26 to the Finance Act 2002” substitute “Part 7 of the Corporation Tax Act 2009”.

Energy Act 2004 (c. 20)

582The Energy Act 2004 is amended as follows.

583(1)Amend section 27 (tax exemption for NDA activities) as follows.

(2)In subsection (8)—

(a)in the definition of “trading income”—

(i)in paragraph (a), after “trade” insert “carried on wholly or partly in the United Kingdom”, and

(ii)in paragraph (b) for “Case I of Schedule D” substitute “Chapter 2 of Part 3 of the Corporation Tax Act 2009”, and

(b)in the definition of “trading losses”—

(i)after “trade” insert “carried on wholly or partly in the United Kingdom”, and

(ii)for “Case I of Schedule D” substitute “Chapter 2 of Part 3 of the Corporation Tax Act 2009”.

(3)In subsection (9)—

(a)in paragraph (a) for “Chapter 2 of Part 4 of the Finance Act 1996 (c. 8)” substitute “Part 5 of the Corporation Tax Act 2009”, and

(b)in paragraph (b) for “under Schedule 26 to the Finance Act 2002 (c. 23) (derivative contracts)” substitute “in accordance with Part 7 of the Corporation Tax Act 2009 (derivative contracts)”.

584(1)Amend section 28 (taxation of activities of the Nuclear Decommissioning Authority chargeable under Case VI of Schedule D) as follows.

(2)In subsection (1)—

(a)in paragraph (a) for “under Case VI of Schedule D” substitute “under or by virtue of any provision to which section 834A of the Income and Corporation Taxes Act 1988 (miscellaneous charges) applies”, and

(b)in the words after paragraph (b) for “Case I of Schedule D” substitute “Chapter 2 of Part 3 of the Corporation Tax Act 2009”.

(3)In subsection (2)(b) for the words from “under” to the end substitute “under or by virtue of a provision to which section 834A of the Income and Corporation Taxes Act 1988 applies, other than section 979 of the Corporation Tax Act 2009 (income not otherwise charged).”

(4)In the title for “Case VI of Schedule D” substitute “miscellaneous provisions”.

585In section 44(2) (extinguishment of BNFL losses for tax purposes)—

(a)in paragraph (b) for “under Case VI of Schedule D” substitute “under or by virtue of any provision to which section 834A of the Income and Corporation Taxes Act 1988 (miscellaneous charges) applies”,

(b)in paragraph (c) for “section 75(9) of the Income and Corporation Taxes Act 1988” substitute “section 1223 of the Corporation Tax Act 2009 (carrying forward expenses of management and other amounts)”,

(c)in paragraph (d) for “Schedule A losses” and “that Act” substitute “UK property business losses” and “the Income and Corporation Taxes Act 1988” respectively, and

(d)in paragraph (h) for “subsection (1) of section 83 of the Finance Act 1996 (c. 8)” and “subsection (3A) of that section” substitute “section 456(1) of the Corporation Tax Act 2009” and “section 457(1) of that Act” respectively.

586(1)Amend Schedule 9 (taxation provisions relating to nuclear transfer schemes) as follows.

(2)In paragraph 11—

(a)in sub-paragraph (2) for “Chapter 2 of Part 4 of the Finance Act 1996 (c. 8)” substitute “Part 5 of the Corporation Tax Act 2009”, and

(b)in sub-paragraph (3) for “Chapter 2 of Part 4 of the Finance Act 1996” and “that Chapter” substitute “Part 5 of the Corporation Tax Act 2009” and “that Part” respectively.

(3)In paragraph 12—

(a)in sub-paragraph (2) for “Schedule 26 to the Finance Act 2002 (c. 23)” substitute “Part 7 of the Corporation Tax Act 2009”, and

(b)in sub-paragraph (3)—

(i)for “Schedule 26 to the Finance Act 2002” substitute “Part 7 of the Corporation Tax Act 2009”, and

(ii)for “that Schedule” substitute “that Part”.

(4)In paragraph 15(4), in the definition of “relevant trading profits and losses” for the words from “under” to the end substitute “under Part 3 of the Corporation Tax Act 2009 in respect of the trade or part of a trade in question for periods in which the trade was carried on wholly or partly in the United Kingdom.”

(5)In paragraph 23—

(a)in sub-paragraph (2) for “Chapter 2 of Part 4 of the Finance Act 1996 (c. 8)” substitute “Part 5 of the Corporation Tax Act 2009”, and

(b)in sub-paragraph (3) for “Chapter 2 of Part 4 of the Finance Act 1996 (c. 8)” and “that Chapter” substitute “Part 5 of the Corporation Tax Act 2009” and “that Part” respectively.

(6)In paragraph 24(2) for “Schedule 26 to the Finance Act 2002 (c. 23)” substitute “Part 7 of the Corporation Tax Act 2009”.

(7)In paragraph 24(3)—

(a)for “Schedule 26 to the Finance Act 2002” substitute “Part 7 of the Corporation Tax Act 2009”, and

(b)for “that Schedule” substitute “that Part”.

(8)In paragraph 27(4), in the definition of “relevant trading profits and losses” for the words from “under” to the end substitute “under Part 3 of the Corporation Tax Act 2009 in respect of the trade or part of a trade in question for periods in which the trade was carried on wholly or partly in the United Kingdom.”

(9)In paragraph 33—

(a)in paragraph (a) for “Chapter 2 of Part 4 of the Finance Act 1996 (c. 8)” substitute “Part 5 of the Corporation Tax Act 2009”, and

(b)in paragraph (b) for “Schedule 26 to the Finance Act 2002 (c. 23)” substitute “Part 7 of the Corporation Tax Act 2009”.

Income Tax (Trading and Other Income) Act 2005 (c. 5)

587The Income Tax (Trading and Other Income) Act 2005 is amended as follows.

588In section 22(2)(b) (payments for wayleaves) for “would otherwise be brought into account in calculating the profits” substitute “incurred by the trader in respect of the wayleave would otherwise be brought into account in calculating profits”.

589(1)Amend section 48 (car or motor cycle hire) as follows.

(2)In subsection (3) for “the deduction is reduced as a result of subsection (2)” substitute “a deduction is reduced as a result of subsection (2), or a corresponding provision,”.

(3)In subsection (4)(a) omit “under section 97 (debts incurred and later released)”.

(4)After subsection (4) insert—

(4A)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: expenses of management), or

(c)section 76ZN(2) of ICTA (car or motor cycle hire: expenses of insurance companies).

590In section 49(2)(b) (car or motor cycle hire: supplementary) after “the car” insert “or motor cycle”.

591In section 60(6) (tenants under taxed leases: introduction) after “288” insert “below or section 228 of CTA 2009”.

592(1)Amend section 64 (restriction on section 61 expenses: lease premium receipts) as follows.

(2)For subsection (1) substitute—

(1)This section applies if a lease has been granted out of the taxed lease and—

(a)in calculating the amount of a receipt of a property business under Chapter 4 of Part 3 (profits of property businesses: lease premiums etc) in respect of the lease, there is a reduction under section 288 (the additional calculation rule) by reference to the taxed receipt, or

(b)in calculating the amount of a receipt of a property business under Chapter 4 of Part 4 of CTA 2009 (profits of a property business: lease premiums etc) in respect of the lease, there is a reduction under section 228 of that Act (the additional calculation rule) by reference to the taxed receipt.

In this section and sections 65 and 67 the receipt that is so reduced is referred to as a “lease premium receipt”.

(3)In subsection (6) after “288” insert “below or section 228 of CTA 2009”.

593In section 65(1)(a) (restrictions on section 61 expenses: lease of part of premises) for “the conditions in section 64(1)(a) and (b) are met” substitute “section 64 applies”.

594In the title of section 66 (corporation tax receipts treated as taxed receipts) after “tax receipts” insert “under ICTA”.

595(1)Amend section 67 (restrictions on section 61 expenses: corporation tax receipts) as follows.

(2)In subsection (3)(a), after “2005” insert “but before 1st April 2009”.

(3)In the title after “receipts” insert “under ICTA”.

596(1)Amend section 71 (educational establishments) as follows.

(2)In subsection (3)—

(a)in paragraph (a) for “education or library board” substitute “education and library board”, and

(b)in paragraph (b) for “or a controlled, maintained, grant-maintained integrated, controlled integrated, voluntary or” substitute “, a grant-aided school or an”.

597Omit section 79(2) (additional payments: change in persons carrying on the trade).

598After section 79 insert—

79AAdditional payments: change in the persons carrying on the trade

(1)This section deals with the application of section 79 in circumstances where there is a change in the persons carrying on the trade.

(2)The employer is treated for the purposes of section 79 as permanently ceasing to carry on the trade unless a person carrying on the trade immediately before the change continues to carry it on after the change.

599In section 80(2) (payments made by the Government) for “79” substitute “79A”.

600In section 88(6)(b) (payments to research associations, universities etc) before “what” insert “to”.

601(1)Amend section 155 (levies and repayments under FISMA 2000) as follows.

(2)In subsection (1) omit the words from “carried” to the end.

(3)For subsection (2) substitute—

(2)A deduction is allowed for any sum—

(a)spent by the person carrying on the trade in paying a levy, or

(b)paid by that person as a result of an award of costs under costs rules,

so far as it is not otherwise allowable.

(4)In subsection (3) after “person” insert “carrying on the trade”.

(5)After subsection (3) insert—

(3A)For the purposes of this section “costs rules” means—

(a)rules made under section 230 of FISMA 2000, or

(b)provision relating to costs contained in standard terms fixed under paragraph 18 of Schedule 17 to FISMA 2000.

(6)In subsection (4)(e) for the words from “(other” to the end substitute “(other than a sum paid as a result of an award of costs under costs rules)”.

602In section 158(1)(d) (lease premiums etc: reduction of receipts) for “term” substitute “terms”.

603In section 170(3)(b) (deduction for capital expenditure) for “section 91(1)(b) of ICTA” substitute “section 147(2)(b) of CTA 2009” and for “section 91(1)(a) of ICTA substitute “section 147(2)(a) of CTA 2009”.

604In section 171(2)(d) (allocation of ancillary capital expenditure) for “section 91(1)(b) of ICTA,” substitute “section 147(2)(b) of CTA 2009”.

605In section 175(2) (basis of valuation of trading stock)—

(a)in paragraph (a) after “trade” insert “, profession or vocation”, and

(b)in paragraph (b) after “trade” insert “, profession or vocation”.

606In section 176(1)(a) (sale basis of valuation: sale to unconnected person) after “trade”, in both places where it occurs, insert “, profession or vocation”.

607In section 177(1)(a) (sale basis of valuation: sale to connected person) after “trade”, in both places where it occurs, insert “, profession or vocation”.

608In section 178(1)(a) (sale basis of valuation: election by connected persons) after “trade”, in both places where it occurs, insert “, profession or vocation”.

609(1)Amend section 180 (cost to buyer of stock valued on sale basis of valuation) as follows.

(2)In subsection (1) after “trade” insert “, profession or vocation”.

(3)In subsection (2)(b) for “section 100(1A) to (1C) of ICTA” substitute “section 164(3) or sections 165 to 167 of CTA 2009”.

610In section 184(1) (basis of valuation of work in progress)—

(a)in paragraph (a) after “a” insert “trade,” and

(b)in paragraph (b) after “that” insert “trade,”.

611In section 194(7) (disposal of know-how as part of disposal of all or part of trade)—

(a)in paragraph (a) for “subsection (3) of section 531 of ICTA” substitute “section 178 of CTA 2009”, and

(b)for “that subsection”, in both places where it occurs, substitute “that section”.

612In section 246(2) (basic meaning of “post-cessation receipt”) for the words from “the occurrence” to the end substitute “a reference to a company ceasing to be within the charge to corporation tax in respect of a trade.”

613In section 249(3) (debts released after cessation) for the words from “the occurrence” to the end substitute “a reference to a company ceasing to be within the charge to corporation tax in respect of a trade.”

614In section 276(3) (introduction to Chapter 4 of Part 3) for “term” substitute “terms”.

615In section 279(3) for “or of” substitute “of or”.

616In the title of section 281 (sums payable for variation or waiver of term of lease) for “term” substitute “terms”.

617(1)Amend section 287 (circumstances in which additional calculation rule applies) as follows.

(2)In subsection (1) for “term” substitute “terms”.

(3)In subsection (4)—

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

(b)in paragraph (b) for “additional calculation rule” substitute “rule in section 288 (the additional calculation rule)”,

(c)after paragraph (b) insert—

(c)there is a receipt under any of sections 217 to 222 of CTA 2009 (receipts in respect of lease premiums, sums payable instead of rent, for surrender of lease and for variation or waiver of terms of lease and assignments) in respect of the lease, or

(d)there would be such a receipt, but for the operation of the rule in section 228 of that Act (the additional calculation rule) in the calculation of its amount., and

(d)in the second sentence for “such a receipt” substitute “a receipt falling within paragraph (a), (b), (c) or (d)”.

618(1)Amend section 288 (the additional calculation rule) as follows.

(2)In subsection (4)—

(a)for “282,” substitute “282 above, or in section 217, 219, 220, 221 or 222 of CTA 2009,”, and

(b)after “section 290(2) to (4)” insert “above”.

(3)In subsection (6)—

(a)omit the “and” immediately before paragraph (d), and

(b)after paragraph (d) insert , and

(e)in the case of a receipt under Chapter 4 of Part 4 of CTA 2009 (profits of property businesses: lease premiums etc), its receipt period within the meaning of that Chapter (see section 228(6) of that Act).

619(1)Amend section 290 (meaning of “unused amount” and “unreduced amount”) as follows.

(2)In subsection (2) for the words from “formula” to the end substitute formula in—

(a)section 277, 279, 280, 281 or 282 above, or

(b)section 217, 219, 220, 221 or 222 of CTA 2009 (corporation tax provisions corresponding to those listed in paragraph (a)).

(3)For subsection (3) substitute—

(3)Subsection (4) applies—

(a)to a taxed receipt under section 277 (lease premiums) as a result of section 278 (amount treated as lease premium where work required), and

(b)to a taxed receipt under section 217 of CTA 2009 (lease premiums) as a result of section 218 of that Act (amount treated as lease premium where work required).

(4)In subsection (5)—

(a)in paragraph (a) after “288” insert “above or section 228 of CTA 2009 (the additional calculation rule)”,

(b)in paragraph (b) after “61” insert “above or section 63 of CTA 2009”, and

(c)in paragraph (c) after “292” insert “below or section 232 of CTA 2009”.

(5)In subsection (6)—

(a)after “288” insert “above or section 228 of CTA 2009”, and

(b)for “that section” substitute “the section concerned”.

620(1)Amend section 293 (restrictions on section 292 expenses: the additional calculation rule) as follows.

(2)For subsection (1) substitute—

(1)This section applies if—

(a)in calculating the amount of a receipt under this Chapter there is a reduction under section 288 (the additional calculation rule) by reference to a taxed receipt, or

(b)in calculating the amount of a receipt under Chapter 4 of Part 4 of CTA 2009 (profits of a property business: lease premiums etc) there is a reduction under section 228 of that Act (the additional calculation rule) by reference to a taxed receipt.

The receipt that is so reduced is referred to in this section as the “lease premium receipt”.

(3)In subsection (6) after “288” insert “above or section 228 of CTA 2009”.

621For section 294(1)(c) (restriction on section 292 expenses: lease of part of premises) substitute—

(c)the condition in subsection (1A) is met.

(1A)The condition is that—

(a)in calculating the amount of a receipt under any of sections 277 to 281 (receipts in respect of lease premiums or sums payable instead of rent, for surrender of lease or for variation or waiver of terms of lease) in respect of the lease, there is a reduction under section 288 by reference to a taxed receipt, or

(b)in calculating the amount of a receipt under any of sections 217 to 221 of CTA 2009 (receipts in respect of lease premiums or sums payable instead of rent, for surrender of lease or for variation or waiver of terms of lease) in respect of the lease, there is a reduction under section 228 of that Act (the additional calculation rule) by reference to a taxed receipt.

The receipt that is so reduced is referred to in this section as the “lease premium receipt”.

622For section 295(2)(b) (limit on reductions and deductions) substitute—

(b)the total of the amounts mentioned in subsection (3).

(3)Those amounts are—

(a)the reductions under section 228 of CTA 2009 (the additional calculation rule) by reference to the taxed receipt,

(b)the deductions allowed in calculating the profits of a property business for expenses under section 232 of CTA 2009 (tenant under taxed lease which uses premises for purposes of property business treated as incurring expenses) by reference to the taxed receipt, and

(c)the deductions allowed in calculating the profits of a trade, profession or vocation for expenses under section 61 above or section 63 of CTA 2009 (tenant under taxed lease who uses land in connection with trade treated as incurring expenses) by reference to the taxed receipt.

623In section 296(1)(a) (corporation tax receipts treated as taxed receipts) after “2005” insert “but before 1st April 2009”.

624In section 298 (taking account of deductions for rent as a result of section 37(4) or 87(2) of ICTA)—

(a)in subsections (1)(a) and (3)(a) after “2005” insert “but before 1st April 2009”, and

(b)in subsection (2) for “295(2)(b)” substitute “295(3)(c)”.

625In section 299(1)(b) (payment of tax by instalments) for “term” substitute “terms”.

626(1)Amend section 303 (rules for determining effective duration of lease) as follows.

(2)For Rule 1 substitute—

  • Rule 1: If—

    (a)

    the terms of the lease or any other circumstances make it unlikely that the lease will continue beyond a date before the end of the term for which the lease was granted, and

    (b)

    the premium was not substantially greater than it would have been had the term been one ending on that date,

    the lease is treated as ending on that date (or the earliest such date).

(3)After subsection (2) insert—

(2A)In Rule 1 “premium” includes—

(a)an amount treated as a premium under section 278 (amount treated as lease premium where work required),

(b)a sum payable by the tenant under the terms subject to which the lease is granted instead of the whole or a part of the rent for a period,

(c)a sum payable by the tenant under the terms subject to which the lease is granted as consideration for the surrender of the lease, and

(d)a sum payable by the tenant (otherwise than by way of rent) as consideration for the variation or waiver of a term of the lease.

627(1)Amend section 304 (applying the rules in section 303) as follows.

(2)In subsection (1)(b) for “term” substitute “terms”.

(3)In subsection (4) for the words from “securing” to the end substitute securing—

(a)an income tax advantage in the application of this Chapter, or

(b)a corporation tax advantage in the application of Chapter 4 of Part 4 of CTA 2009 (profits of property business: lease premiums etc).

(4)In subsection (5) after “applying” insert “paragraph (b) of”.

628In section 318(4) for “section 30 of ICTA” substitute “sections 255 to 257 of CTA 2009”.

629(1)Amend section 356 (application to Schedule A businesses) as follows.

(2)In subsection (1) for “a Schedule A business” substitute “one within the charge to corporation tax”.

(3)In subsection (2) for the words from “includes” to the end substitute “includes, in the case of a company, the occurrence of an event treated under section 289 of CTA 2009 (company starting or ceasing to be within the charge to corporation tax) as the company permanently ceasing to carry on the business.”

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

(5)In the title for “Schedule A businesses” substitute “businesses within the charge to corporation tax”.

630In section 413(4) (person liable) for paragraph (b) substitute—

(b)section 947 of CTA 2009 (under which similar provision is made for the purposes of Chapter 3 of Part 10 of that Act).

631In section 419(2) (loans and advances to persons who die) for paragraph (b) substitute—

(b)section 947 of CTA 2009” (under which similar provision is made for the purposes of Chapter 3 of Part 10 of that Act).

632In section 466(3) (person liable: personal representatives) for “section 701(8) of ICTA” and “Part 16 of ICTA” substitute “section 947 of CTA 2009” and “Chapter 3 of Part 10 of CTA 2009” respectively.

633In section 496(7) (modification of section 494: qualifying endowment policies held as security for company debts) in the definition of “accounting period” for “section 12 of ICTA” substitute “Chapter 2 of Part 2 of CTA 2009”.

634In section 671 (successive absolute interests)—

(a)at the end of subsection (4) add “(or, where the previous holder is a company chargeable to corporation tax, having regard to the application of section 954(4) of CTA 2009 to the previous holder)”, and

(b)at the end of subsection (6) add “(but, in a case where the last previous holder or any earlier previous holder is a company chargeable to corporation tax, having regard to the application of section 954(6) of CTA 2009 to the previous holder)”.

635After section 749 insert—

749AInterest on tax overpaid

No liability to income tax arises in respect of interest paid under section 826 of ICTA (interest on tax overpaid).

636In section 754(1) (redemption of funding bonds) for “section 582(1) of ICTA” substitute “section 413 of CTA 2009”.

637(1)Amend section 839 (annual payments payable out of relevant foreign income) as follows.

(2)In subsection (1) for “A to C” substitute “A, B1 or B2 and C”.

(3)In subsection (3)—

(a)for “B” substitute “B1”, and

(b)omit “or to corporation tax under Case III of Schedule D”.

(4)After subsection (3) insert—

(3A)Condition B2 is that, had the payment arisen in the United Kingdom it would have been—

(a)required to be brought into account under Part 5 of CTA 2009 (loan relationships) as a non-trading credit, or

(b)chargeable to corporation tax under Chapter 5 of Part 10 of that Act (distributions from unauthorised unit trusts) or Chapter 7 of that Part (annual payments not otherwise charged).

638In section 847(2) (partnerships: general provisions), in the words before paragraph (a) for the words from “are expressed” to “also apply” substitute “which are expressed to apply to trades also apply, unless otherwise indicated (whether expressly or by implication)”.

639In section 849 (calculation of firm’s profits or losses) after subsection (3) insert—

(4)In calculating under subsection (2) or (3) the profits of a trade for any period of account no account is taken of any losses for another period of account.

640For section 850 (allocation of firm’s profits or losses between partners) substitute—

850Allocation of firm’s profits or losses between partners

(1)For any period of account a partner’s share of a profit or loss of a trade carried on by a firm is determined for income tax purposes in accordance with the firm’s profit-sharing arrangements during that period.

This is subject to sections 850A and 850B.

(2)In this section and sections 850A and 850B “profit-sharing arrangements” means the rights of the partners to share in the profits of the trade and the liabilities of the partners to share in the losses of the trade.

850AProfit-making period in which some partners have losses

(1)For any period of account, if—

(a)the calculation under section 849 in relation to a partner (“A”) produces a profit, and

(b)A’s share determined under section 850 is a loss,

A’s share of the profit of the trade is neither a profit nor a loss.

(2)For any period of account, if—

(a)the calculation under section 849 in relation to A produces a profit,

(b)A’s share determined under section 850 is a profit, and

(c)the comparable amount for at least one other partner is a loss,

A’s share of the profit of the trade is the amount produced by the formula in subsection (3).

(3)The formula is—

where—

  • FP is the amount of the firm’s profit calculated under section 849 in relation to A,

  • PP is the amount determined under section 850 to be A’s profit, and

  • TCP is the total of the comparable amounts attributed to other partners under step 3 in subsection (4) that are profits.

(4)The comparable amount for each partner other than A is determined as follows.

  • Step 1

    Take the firm’s profit calculated under section 849 in relation to A.

  • Step 2

    Determine in accordance with the firm’s profit-sharing arrangements during the relevant period of account the shares of that profit that are attributable to each of the other partners.

  • Step 3

    Each such share is the comparable amount for the partner to whom it is attributed.

(5)In subsections (2) to (4) “partner” means any partner in the firm, whether or not chargeable to income tax.

850BLoss-making period in which some partners have profits

(1)For any period of account, if—

(a)the calculation under section 849 in relation to a partner (“A”) produces a loss, and

(b)A’s share determined under section 850 is a profit,

A’s share of the loss of the trade is neither a profit nor a loss.

(2)For any period of account, if—

(a)the calculation under section 849 in relation to A produces a loss,

(b)A’s share determined under section 850 is a loss, and

(c)the comparable amount for at least one other partner is a profit,

A’s share of the loss of the trade is the amount produced by the formula in subsection (3).

(3)The formula is—

where—

  • FL is the amount of the firm’s loss calculated under section 849 in relation to A,

  • PL is the amount determined under section 850 to be A’s loss, and

  • TCL is the total of the comparable amounts attributed to other partners under step 3 in subsection (4) that are losses.

(4)The comparable amount for each partner other than A is determined as follows.

  • Step 1

    Take the firm’s loss calculated under section 849 in relation to A.

  • Step 2

    Determine in accordance with the firm’s profit-sharing arrangements during the relevant period of account the shares of that loss that are attributable to each of the other partners.

  • Step 3

    Each such share is the comparable amount for the partner to whom it is attributed.

(5)In subsections (2) to (4) “partner” means any partner in the firm, whether or not chargeable to income tax.

641(1)Amend section 860 (adjustment income) as follows.

(2)After subsection (1) insert—

(1A)A change in the persons carrying on a property business from one period of account to the next does not prevent Chapter 7 of Part 3 (adjustment income) applying in relation to the property business so long as a person carrying on the property business immediately before the change continues to carry on the property business immediately after the change.

(3)In subsection (3)—

(a)after “trade” insert “or property business”, and

(b)after “Chapter 17 of Part 2” insert “, or Chapter 7 of Part 3,”.

(4)In subsection (6)—

(a)in paragraph (a), at the end insert “or Chapter 7 of Part 3 (as the case requires)”, and

(b)in paragraph (b) after “trade” insert “or property business (as the case requires)”.

642For section 861 (sale of patent rights: effect of partnership changes) substitute—

861Sale of patent rights: effect of partnership changes

(1)This section applies if each of the following conditions is met—

(a)a person (“the trader”) sells the whole or part of any patent rights in carrying on a trade,

(b)tax is chargeable under section 587 of this Act or section 912 of CTA 2009 on the proceeds of the sale or on any instalment of those proceeds,

(c)the tax is chargeable in one or more tax years or accounting periods (referred to in this section as “the tax charge periods”),

(d)there is a change in the persons carrying on the trade at any time between the beginning of the first of those tax charge periods and the end of the last of them, and

(e)the partnership condition and the continuity condition are met.

(2)The partnership condition is that—

(a)the trader is a firm at the time of the sale, or

(b)the trade is carried on in partnership at any time between the beginning of the first of the tax charge periods and the end of the last of them.

(3)The continuity condition is—

(a)in the case of an amount chargeable under section 587, that a person who carried on the trade immediately before the change continues to carry it on after the change, or

(b)in the case of an amount chargeable under section 912 of CTA 2009, that a company which carried on the trade in partnership immediately before the change continues to carry it on in partnership after the change.

(4)Any amounts chargeable in respect of the proceeds or instalment that would (apart from this section) be treated in accordance with Chapter 2 of Part 5 of this Act or Chapter 3 of Part 9 of CTA 2009 as profits of the seller of the patent rights chargeable in tax charge periods falling wholly after the change are treated for income tax purposes—

(a)as proceeds, arising at a constant daily rate during the remainder of the relevant period, of a sale of patent rights by the person or persons carrying on the trade after the change, and

(b)if the trade is carried on in partnership after the change, as arising to the partners in shares calculated in accordance with the firm’s profit-sharing arrangements.

(5)If the change occurs during the course of a tax charge period—

(a)any person who would, but for this section, have been charged to income tax in that period on a sum (“S”) in respect of the proceeds or instalment is so charged on a fraction of S proportionate to the length of the part of the period before the change, and

(b)the balance of S not dealt with under paragraph (a) is treated for the purposes of this section and section 1271 of CTA 2009 (sale of patent rights: effect of partnership changes) as if it were an amount such as is described in subsection (4).

(6)In this section “the remainder of the relevant period” means—

(a)if one or more tax charge periods begins after the tax charge period in which the change occurs, the period beginning immediately after the change and ending 6 years after the beginning of the first of the tax charge periods, or

(b)otherwise, the period beginning immediately after the change and ending at the end of the tax charge period in which the change occurs.

(7)In this section “profit-sharing arrangements” means the rights of the partners to share in the profits of the trade.

643(1)Amend section 862 (sale of patent rights: effect of later cessation of trade) as follows.

(2)For subsections (1) and (2) substitute—

(1)This section applies if—

(a)a person (“the trader”) sells the whole or part of any patent rights in carrying on a trade,

(b)by virtue of section 861 amounts are chargeable to income tax under section 587 as profits of one or more persons for the time being carrying on the trade in partnership,

(c)a partner permanently ceases to carry on the trade after that, and

(d)no person who carried on the trade immediately before the cessation continues to carry on the trade immediately after the cessation.

(2)Any amounts mentioned in subsection (1)(b) which would have been chargeable in any tax year later than that in which the cessation occurred are charged in the tax year in which the cessation occurred.

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

644Omit section 881 (disapplication of corporation tax: section 9 of ICTA).

645(1)Amend Schedule 1 (consequential amendments) as follows.

(2)Omit paragraph 312(4)(b) and the “and” immediately before it.

646(1)Amend Schedule 2 (transitionals and savings etc) as follows.

(2)In paragraph 70(2) for “term” substitute “terms”.

(3)In paragraph 71(2) for “term” substitute “terms”.

(4)In paragraph 109(5) for “section 12 of ICTA” substitute “Chapter 2 of Part 2 of CTA 2009”.

647(1)Amend Schedule 4 (abbreviations and defined expressions) as follows.

(2)In Part 1 at the end insert—

CTA 2009The Corporation Tax Act 2009

(3)In Part 2—

(a)in the entry for “accounting period”, in the second column—

(i)for “sections 12 and” substitute “section”, and

(ii)at the end insert “and Chapter 2 of Part 2 of CTA 2009”, and

(b)omit the entry for “Schedule A business”.

Finance Act 2005 (c. 7)

648The Finance Act 2005 is amended as follows.

649In section 47A(6) (alternative finance arrangements: diminishing shared ownership) for “Taxes” to “1970)” substitute “Income Tax Acts, TCGA 1992 and all other enactments relating to capital gains tax”.

650In section 48A (alternative finance arrangements: alternative finance bond: introduction) in subsection (3) after “this section” insert “and section 507 of CTA 2009 (investment bond arrangements)”.

651In section 48B (alternative finance arrangements: alternative finance investment bond: effects)—

(a)in subsections (2) and (3) after “any tax” insert “other than the Corporation Tax Acts”,

(b)in subsection (4) after “section 48A”, in both places where it occurs, insert “of this Act or section 507 of CTA 2009”, and

(c)in subsection (5)—

(i)after “section 48A” insert “of this Act or section 507 of CTA 2009”,

(ii)after paragraph (b) insert “or”, and

(iii)omit paragraph (d) and the “or” immediately before it.

652In section 49(2) (alternative finance arrangements: deposit) for “profit share return” substitute “alternative finance return”.

653In section 49A (alternative finance arrangements: profit share agency)—

(a)in subsection (2) for “profit share return” substitute “alternative finance return”, and

(b)in subsection (3) for “Tax Acts” substitute “Income Tax Acts”.

654Omit section 50 (treatment of alternative finance arrangements: companies).

655In section 51 (treatment of alternative finance arrangements: persons other than companies) in subsections (1), (4) and (5)(b) omit “or profit share return”.

656In section 52 (provision not at arm’s length)—

(a)in subsection (2) omit “or profit share return”, and

(b)omit subsection (6).

657Omit section 54 (return not to be treated as distribution).

658In section 54A (treatment of section 47, 49 and 49A arrangements as loans: Community Investment Tax Relief)—

(a)in subsection (2)(a) after “or 49A” insert “of this Act or section 503, 505 or 506 of CTA 2009”,

(b)in subsection (2)(b) omit “or profit share return”,

(c)in subsections (3) and (4) after “section 47” insert “of this Act or section 503 of CTA 2009”,

(d)in subsection (5) after “section 49” insert “of this Act or section 505 of CTA 2009”, and

(e)in subsection (6) after “section 49A” insert “of this Act or section 506 of CTA 2009”.

659In section 55 (further provisions) omit “, corporation tax”.

660In section 56 (application of Chapter)—

(a)in subsections (2) and (3) for “profit share return” substitute “alternative finance return”,

(b)omit subsection (4)(b) and the “and” immediately before it,

(c)omit subsection (5), and

(d)in subsection (6)—

(i)for “Section 54” substitute “Section 209(6A) of ICTA”, and

(ii)for “profit share return” substitute “alternative finance return”.

661In section 57 (interpretation of Chapter)—

(a)in the definition of “alternative finance return” for “and 47A(5)” substitute “47A(5), 48B(1), 49(2) and 49A(2)”, and

(b)omit the definition of “profit share return”.

662In section 83(8) (application of accounting standards to securitisation companies) in the definition of “asset” for “Schedule 26 to FA 2002 (derivative contracts) (see paragraph 12 of that Schedule)” substitute “Part 7 of CTA 2009 (derivative contracts) (see sections 580, 581 and 582 of that Act)”.

663In section 105 (interpretation) after the definition of “CAA 2001” insert—

“CTA 2009” means the Corporation Tax Act 2009;.

664(1)Amend Schedule 2 (alternative finance arrangements: further provisions) as follows.

(2)Omit paragraph 2.

(3)Omit paragraph 7.

(4)In paragraphs 8, 10, 11(c), 12 and 13 omit “or profit share return”.

665In Schedule 4 (accounting practice and related matters) omit paragraphs 27 and 52.

Railways Act 2005 (c. 14)

666The Railways Act 2005 is amended as follows.

667(1)Amend Schedule 10 (taxation provisions relating to transfer schemes) as follows.

(2)In paragraph 7—

(a)in sub-paragraph (a) for “Chapter 2 of Part 4 of the Finance Act 1996 (c. 8)” substitute “Part 5 of the Corporation Tax Act 2009”, and

(b)in sub-paragraph (b) for “Schedule 26 to the Finance Act 2002 (derivative contracts)” substitute “Part 7 of the Corporation Tax Act 2009 (derivative contracts)”.

(3)In paragraph 10(5) for the words from “under” to the end substitute “under Part 3 of the Corporation Tax Act 2009 in respect of the trade or part of a trade in question for periods in which the trade was carried on wholly or partly in the United Kingdom.”

(4)In paragraph 17—

(a)in sub-paragraph (1) for “Schedule 29 to the Finance Act 2002 (c. 23)” and “an existing asset”, in both places where it occurs, substitute “Part 8 of the Corporation Tax Act 2009” and “a pre-FA 2002 asset” respectively, and

(b)in sub-paragraph (2) for “that Schedule”, in both places where it occurs, substitute “that Part”.

(5)In paragraph 18—

(a)in sub-paragraph (1) for “Chapter 2 of Part 4 of the Finance Act 1996 (c. 8)” substitute “Part 5 of the Corporation Tax Act 2009”, and

(b)in sub-paragraph (2) for “paragraph 12(8) of Schedule 9 to” substitute “section 335(6) of”.

(6)In paragraph 19—

(a)in sub-paragraph (1) for “Schedule 26 to the Finance Act 2002 (derivative contracts)” substitute “Part 7 of the Corporation Tax Act 2009 (derivative contracts)”, and

(b)in sub-paragraph (2) for “paragraph 28(6) of that Schedule” substitute “section 624(3) of that Act”.

(7)In paragraph 28—

(a)in sub-paragraph (1) for “paragraph 11 of Schedule 9 to the Finance Act 1996 (c. 8)” substitute “section 444 of the Corporation Tax Act 2009”, and

(b)in sub-paragraph (2) for “Chapter 2 of Part 4 of the Finance Act 1996” and “that Chapter” substitute “Part 5 of the Corporation Tax Act 2009” and “that Part” respectively.

Finance (No. 2) Act 2005 (c. 22)

668The Finance (No. 2) Act 2005 is amended as follows.

669In section 18 (section 17(3): specific powers) for subsection (2)(c) substitute—

(c)modify the meaning of “relevant holding” for the purposes of—

(i)sections 490 and 492 of the Corporation Tax Act 2009 (loan relationships), and

(ii)section 587 of that Act (derivative contracts).

670(1)Amend section 26 (receipts cases) as follows.

(2)In subsection (7) for the words from “person who” to the end substitute person who—

(a)is charged to corporation tax under Part 3 of CTA 2009 (trading income) in respect of distributions of companies that are received in the course of a trade not consisting of insurance business, or

(b)would be so charged if resident in the United Kingdom.

(3)In subsection (10)—

(a)for “Chapter 2 of Part 4 of FA 1996” substitute “Part 5 of CTA 2009 (loan relationships)”, and

(b)for the words from “section 91A” to the end substitute “section 523 of that Act (application of that Part of that Act to certain shares as rights under creditor relationship)”.

671In section 27(2) (rule as to qualifying payment) for the words from “an amount” to the end substitute “a receipt of the company which is chargeable for that period under the charge to corporation tax on income”.

672In section 71 (interpretation) after the definition of “CAA 2001” insert—

CTA 2009” means the Corporation Tax Act 2009;.

673In Schedule 6 (accounting practice and related matters)—

(a)omit paragraph 7 (loan relationships with embedded derivatives), and

(b)omit paragraph 9 (exchange gains and losses).

674In Schedule 7 (avoidance involving financial arrangements) in paragraph 14—

(a)in sub-paragraph (4)(b) after “1996” insert “or Part 5 of CTA 2009”, and

(b)in sub-paragraph (5) after “1996” insert “and Part 5 of CTA 2009”.

Finance Act 2006 (c. 25)

675The Finance Act 2006 is amended as follows.

676Omit sections 31 to 41 (provisions about films, in particular film tax relief).

677In section 42(2) (film tax relief: further provisions) omit—

(a)“Part 1 deals with entitlement to the relief;”, and

(b)“Part 4 is about provisional entitlement to relief”.

678Omit sections 43 to 45 (film losses).

679At the end of each of sections 46 and 47 insert—

(6)The provisions of sections 1181 to 1187 of CTA 2009 apply for the purposes of this section as if this section were contained in Part 15 of that Act.

680Omit sections 48 to 50 (sound recordings).

681Omit section 52 (films: application of provisions to certain films already in production).

682Omit section 53(2) (films and sound recordings: commencement etc).

683In section 97 (beneficial loans to employees)—

(a)in subsection (1)(a) after “2005” insert “or section 503 or 504 of CTA 2009”,

(b)in subsection (2)(b)(i) after “section 47” insert “of FA 2005 or section 503 of CTA 2009”, and

(c)in subsection (2)(b)(ii) after “section 47A” insert “of FA 2005 or section 504 of CTA 2009”.

684In section 104(1) (property rental business)—

(a)in paragraph (a)—

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

(ii)for “section 832(1) of ICTA” substitute “section 205 of CTA 2009”, and

(b)in paragraph (b) for “section 70A(4) of ICTA” substitute “section 206 of that Act”.

685In section 112 (entry charge) for subsection (1) substitute—

(1)A company to which this Part applies shall be chargeable under the charge to corporation tax on income on an amount of notional income calculated in accordance with subsection (3).

686In section 115(4) (profit: financing-cost ratio)—

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

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

(c)in paragraph (c) for “under Schedule 26 to FA 2002” substitute “in accordance with Part 7 of CTA 2009”.

687In section 117(3)(b) (cancellation of tax advantage) omit “under Case VI of Schedule D”.

688(1)Amend section 120 (calculation of profits) as follows.

(2)For subsection (2) substitute—

(2)Profits (of any kind) are calculated in the same way as profits of a UK property business are calculated for the purposes of the charge to tax under Chapter 2 of Part 4 of CTA 2009 (as to which see, in particular, section 210 of that Act).

(3)In subsection (3) for the words from the beginning to “(Schedule A:” substitute “Section 211(1) of CTA 2009 (property businesses:”.

(4)For subsection (4)(c) substitute—

(c)“embedded derivatives” is to be read in accordance with section 584 or 586 (as the case may be) of CTA 2009, and

(d)“the host contract” means—

(i)the rights and liabilities within section 584(1)(b)(ii) of CTA 2009, or

(ii)the rights and liabilities within section 586(1)(b)(ii) of that Act,

as the case may be.

(5)In subsection (5)—

(a)for “Schedule 26 to FA 2002” substitute “Part 7 of CTA 2009”, and

(b)for “paragraph 4(2)(b)” substitute “section 589(2)(b) and (c) of that Act”.

689(1)Amend section 121 (distributions: liability to tax) as follows.

(2)In subsection (1)(a) for “Schedule A business” substitute “UK property business (within the meaning of section 205 of CTA 2009)”.

(3)In subsection (2)(a) for “Schedule A business” substitute “UK property business (within the meaning of section 205 of CTA 2009)”.

(4)In subsection (3)(a) for the words from “dealer” to the end substitute “person who is charged to tax under Part 3 of CTA 2009 (trading income) in respect of distributions made by companies that are received in the course of a trade not consisting of insurance business,”.

(5)Omit subsection (4).

(6)In subsection (6)—

(a)in paragraph (a) for “Schedule A business” substitute “UK property business (within the meaning of section 205 of CTA 2009)”, and

(b)in paragraph (c) for “section 70A(4) of ICTA” substitute “section 206 of CTA 2009”.

690In section 136(2) (availability of group reliefs) for paragraphs (d) to (f) substitute—

(d)Chapters 4 and 6 to 8 of Part 5 of CTA 2009 (loan relationships),

(e)Part 7 of that Act (derivative contracts), and

(f)Part 8 of that Act (intangible fixed assets).

691In section 139(2) (manufactured dividends), in the provision substituted for paragraph 2(2) of Schedule 23A to ICTA, in sub-paragraph (2B)(b) for “section 75 of this Act” substitute “Chapter 2 of Part 16 of CTA 2009”.

692In section 179 (interpretation) after the definition of “CAA 2001” insert—

“CTA 2009” means the Corporation Tax Act 2009;.

693Omit Schedule 4 (taxation of activities of film production company).

694In Schedule 5 (film tax relief: further provisions)—

(a)omit Part 1 (entitlement to film tax relief),

(b)omit paragraphs 24 and 25, and

(c)omit Part 4 (provisional entitlement to relief).

695(1)Amend Schedule 10 (sale etc of lessor companies etc) as follows.

(2)In paragraph 5(1) after “trade” insert “carried on wholly or partly in the United Kingdom” and for “Case I of Schedule D” substitute “Chapter 2 of Part 3 of CTA 2009”.

(3)In paragraph 23(5) for the words from “means the business” to the end substitute “means the business the profits or losses of which are determined, in relation to the company, under section 1259 of CTA 2009.”

(4)In paragraph 28(2) for paragraphs (a) and (b) substitute “any matter that would be taken into account in determining under section 1262 of CTA 2009 (but without regard to sections 1263 and 1264 of that Act) the company’s share at that time of the profits or loss of the business.”

(5)In paragraph 38(9)—

(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)”.

696(1)Amend Schedule 15 (accountancy change: spreading of adjustment), Part 2 (corporation tax) as follows.

(2)In paragraph 9(1), in the words after paragraph (c), for “section 64 of and Schedule 22 to FA 2002” substitute “Chapter 14 of Part 3 of or section 262 of CTA 2009”.

(3)In paragraph 10(5)(a) for “Schedule 22 to FA 2002” substitute “Chapter 14 of Part 3 of or section 262 of CTA 2009”.

(4)In paragraph 11(1)(b) for “section 12(7ZA) of ICTA” substitute “section 10 of CTA 2009”.

(5)In paragraph 12(1)(b) for “section 12(7) of ICTA” substitute “section 12 of CTA 2009”.

(6)In paragraph 14(1)(b) for “Schedule A business” substitute “UK property business”.

697(1)Amend Schedule 16 (real estate investment trusts: excluded business and income) as follows.

(2)In paragraph 4 for “Schedule A” substitute “Chapter 3 of Part 4 of CTA 2009”.

(3)In paragraph 13 for “section 118ZA(4) of ICTA” substitute “section 1273(4) of CTA 2009”.

698(1)Amend Schedule 17 (group real estate investment trusts: modifications) as follows.

(2)In paragraph 11(1)(d)(ii) for “a charge to corporation tax under Case VI of Schedule D” substitute “the charge to corporation tax on income”.

(3)In paragraph 32(1)(b) for “or as profits of a Schedule A business” substitute “or as profits of a UK property business under Chapter 3 of Part 4 of CTA 2009”.

Income Tax Act 2007 (c. 3)

699The Income Tax Act 2007 is amended as follows.

700For section 5 substitute—

5Income tax and companies

Section 3 of CTA 2009 disapplies the provisions of the Income Tax Acts relating to the charge to income tax in relation to income of a company (not accruing to it in a fiduciary or representative capacity) if—

(a)the company is UK resident, or

(b)the company is non-UK resident and the income is within its chargeable profits as defined by section 19 of that Act (profits attributable to its permanent establishment in the United Kingdom).

701In section 276(3) (conditions relating to income) for “paragraph 14(3) of Schedule 26 to FA 2002 as if they were non-trading credits or non-trading debits” substitute “section 574 of CTA 2009 (non-trading credits and debits to be brought into account under Part 5 of that Act)”.

702In section 489(6) (the “applicable period” in relation to shares) for “paragraph 9 of Schedule 4AA to ICTA” substitute “section 989 of CTA 2009”.

703In section 550(a) (meaning of “relievable gift”) for “section 83A of ICTA” substitute “section 105 of CTA 2009”.

704In section 557(1)(b)(ii) (substantial donor transactions: supplementary) after “2005” insert “or section 501(2) of CTA 2009”.

705(1)Amend section 835 (residence rules for trustees and companies) as follows.

(2)Omit subsection (2).

(3)In the title omit “and companies”.

706After section 835 insert—

835AResidence of companies

Chapter 3 of Part 2 of CTA 2009 (rules for determining residence of companies) applies for the purposes of the Income Tax Acts as it applies for the purposes of the Corporation Tax Acts.

707In section 899(4)(b) (meaning of “qualifying annual payment”) for “charged to corporation tax under Case III of Schedule D” substitute which is—

(i)required to be brought into account under Part 5 of CTA 2009 (loan relationships) as a non-trading credit, or

(ii)from a source in the United Kingdom and chargeable to corporation tax under Chapter 5 of Part 10 of that Act (distribution from unauthorised unit trusts) or Chapter 7 of that Part (annual payments not otherwise charged).

708In section 904 (annual payments for dividends or non-taxable consideration) for subsection (2) substitute—

(2)The payment must be—

(a)a payment charged to income tax under Part 5 of ITTOIA 2005 (miscellaneous income), or

(b)a payment which is—

(i)required to be brought into account under Part 5 of CTA 2009 (loan relationships) as a non-trading credit, or

(ii)from a source in the United Kingdom and chargeable to corporation tax under Chapter 5 of Part 10 of that Act (distributions from unauthorised unit trusts) or Chapter 7 of that Part (annual payments not otherwise charged).

709(1)Amend section 910 (proceeds of a sale of patent rights: payments to non-UK residents) as follows.

(2)In subsection (1)(b) for “section 524(3) of ICTA” substitute “section 912 of CTA 2009”.

(3)In subsection (6)(b) for “section 524(9) of ICTA” substitute “section 919 of CTA 2009”.

710In section 934(4) (non-UK resident companies) for “section 11(2) of ICTA” substitute “section 19 of CTA 2009”.

711In section 937(5)(c) (partnerships)—

(a)for “section 11(2) of ICTA” substitute “section 19 of CTA 2009”, and

(b)for “sections 114 and 115 of ICTA” substitute “Part 17 of that Act”.

712In section 939(1)(b) (duty to retain bonds where issue treated as payment of interest) for “section 582(1)(a) of ICTA” substitute “section 413 of CTA 2009”.

713(1)Amend section 941 (deemed payments to unit holders and deemed deductions of income tax) as follows.

(2)In subsection (1), after “ITTOIA 2005” insert “or Chapter 5 of Part 10 of CTA 2009”.

(3)In subsection (2), after “ITTOIA 2005” insert “and section 973(2) of CTA 2009”.

(4)Omit subsections (4) and (5).

(5)In subsection (6)—

(a)in the definition of “deemed deduction”, omit “or (5)”, and

(b)in the definition of “deemed payment”, omit “or (4)”.

714In section 948(2) (meaning of “accounting period”) for the words from “section” to “assessment)” substitute “Chapter 2 of Part 2 of CTA 2009 (accounting periods)”.

715In section 965(2) (overview of sections 966 to 970) for “section 556 of ICTA” substitute “section 1309 of CTA 2009”.

716(1)Amend section 971 (income tax in respect of non-resident landlords) as follows.

(2)In subsection (2) for the words from “chargeable” to the end substitute “chargeable as the profits of a UK property business under Chapter 3 of Part 3 of ITTOIA 2005 or Chapter 3 of Part 4 of CTA 2009.”

(3)In subsection (3)(a) for “Schedule A business, or a UK property business,” substitute “UK property business (within the meaning of Chapter 2 of Part 3 of ITTOIA 2005 or Chapter 2 of Part 4 of CTA 2009)”.

717In section 976(6) (arrangements for payments of interest less tax or at a specified net rate) for paragraph (b) substitute—

(b)interest which is required to be brought into account under Part 5 of CTA 2009 (loan relationships) as a non-trading credit of the recipient.

718In section 980(2) (derivative contracts: exception from duties to deduct) for “Schedule 26 to FA 2002” substitute “Part 7 of CTA 2009”.

719In section 989 (definitions) omit the definition of “Schedule A business”.

720In section 1017 (abbreviated references to Acts) after the definition of “CAA 2001” insert—

“CTA 2009” means the Corporation Tax Act 2009,.

721In Schedule 4 (index of defined expressions) omit the entry for “Schedule A business”.

Finance Act 2007 (c. 11)

722The Finance Act 2007 is amended as follows.

723In section 113 (interpretation) after the definition of “CRCA 2005” insert—

“CTA 2009” means the Corporation Tax Act 2009;.

724In Schedule 3 (managed service companies) omit paragraph 10.

725(1)Amend Schedule 7 (insurance business: gross roll-up business etc) as follows.

(2)In paragraph 85—

(a)in sub-paragraph (1) omit “(a “Case VI loss”)” and “(a “Case I loss”)”, and

(b)in sub-paragraph (2)—

(i)for “Case VI losses” substitute “losses so treated”, and

(ii)for “Case I losses” substitute “losses of the transferee”.

(3)For the italic cross-heading before paragraph 85 substitute “Losses transferred under section 444AZA”.

(4)In paragraph 86(4) and (5) for “Case VI” substitute “gross roll-up business”.

(5)For the italic cross-heading before paragraph 86 substitute “Losses transferred under section 444AZB”.

726(1)Amend Schedule 13 (sale and repurchase of securities) as follows.

(2)In paragraph 1(1) after “in that case” insert “in respect of chargeable gains”.

(3)Omit paragraphs 2 to 5, 7 to 10 and 12.

(4)In paragraph 14—

(a)in the definition of “creditor quasi-repo” for “paragraph 8” substitute “section 544 of CTA 2009”,

(b)in the definition of “creditor repo” for “paragraph 7” substitute “section 543 of CTA 2009”,

(c)in the definition of “debtor quasi-repo” for “paragraph 3” substitute “section 549 of CTA 2009”,

(d)in the definition of “debtor repo” for “paragraph 2” substitute “section 548 of CTA 2009”, and

(e)in the definition of “the loan relationship rules” for “Chapter 2 of Part 4 of FA 1996” substitute “Part 5 of CTA 2009”.

(5)In paragraph 15(9)(b) for “paragraph 12” and “paragraph 10” substitute “section 547 of CTA 2009” and “section 546 of that Act” respectively.

727In paragraph 28(fa) of Schedule 24 (penalties for errors)—

(a)in paragraph (i) for “Schedule 20 to FA 2000” substitute “Chapter 2 or 7 of Part 13 of CTA 2009”,

(b)in paragraph (ii) for “Schedule 22 to FA 2001” substitute “Chapter 3 or 4 respectively of Part 14 of CTA 2009”,

(c)omit paragraph (iii), and

(d)in paragraph (iv) for “Schedule 5 to FA 2006” substitute “Chapter 3 of Part 15 of CTA 2009”.

Finance Act 2008 (c. 9)

728The Finance Act 2008 is amended as follows.

729Omit section 29 (cap on R&D aid).

730Omit section 36(1) (company gains from investment life insurance contracts etc).

731In section 77(6), in the words after paragraph (b) for “section 578A of ICTA and section 50 of ITTOIA 2005 apply” substitute “section 50 of ITTOIA 2005 applies”.

732In section 154(6) (stamp duty and stamp duty reserve tax: alternative investment bonds) after “2005” insert “or section 507 of CTA 2009”.

733In section 165(1) (interpretation) after the definition of “CRCA 2005” insert—

“CTA 2009” means the Corporation Tax Act 2009,.

734In Schedule 10 (cap on R&D aid), omit paragraphs 1 to 7.

735Omit Schedule 13 (company gains from investment life insurance contracts).

736In Schedule 15 (changes in trading stock), omit Part 2.

737In Schedule 25 (first-year tax credits)—

(a)in paragraph 14(6)(b) for “paragraph 4(4) of Schedule 11 to FA 1996” substitute “section 391(3)(b) of CTA 2009”, and

(b)in paragraph 16(3)(b) for “paragraph 4(4) of Schedule 11 to FA 1996” substitute “section 391(3)(b) of CTA 2009”.

Crossrail Act 2008 (c. 18)

738The Crossrail Act 2008 is amended as follows.

739(1)Amend Schedule 13 (transfer schemes: tax provisions) as follows.

(2)In paragraph 3 (interpretation: supplementary) after the definition of “CAA 2001” insert—

“CTA 2009” means the Corporation Tax Act 2009;.

(3)In paragraph 5(5) (computation of profits and losses in respect of transfer of trade) for the words from “under” to the end substitute “under Part 3 of CTA 2009 in respect of the trade or part of a trade in question for periods in which the trade was carried on wholly or partly in the United Kingdom.”

(4)In paragraph 6(5) (transfers of trading stock) for “has the same meaning as in section 100 of ICTA” substitute “has the meaning given by section 163 of CTA 2009”.

(5)In paragraph 13 (continuity in relation to transfer of intangible assets)—

(a)in sub-paragraph (1) for “Schedule 29 to FA 2002” substitute “Part 8 of CTA 2009”, and

(b)in sub-paragraph (2) for “Schedule”, in both places where it occurs, substitute “Part”.

(6)In paragraph 14 (continuity in relation to loan relationships)—

(a)in sub-paragraph (1) for “Chapter 2 of Part 4 of FA 1996” substitute “Part 5 of CTA 2009”, and

(b)in sub-paragraph (2) for “paragraph 12(8) of Schedule 9 to” substitute “section 335(6) of”.

(7)In paragraph 15 (continuity in relation to derivative contracts)—

(a)in sub-paragraph (1) for “Schedule 26 to FA 2002” substitute “Part 7 of CTA 2009”, and

(b)in sub-paragraph (2) for “paragraph 28(6) of that Schedule” substitute “section 624(3) of that Act”.

(8)In paragraph 18(6) (transfers of trading stock) for “has the same meaning as in section 100 of ICTA” substitute “has the meaning given by section 163 of CTA 2009”.

(9)In paragraph 23 (neutral effect of transfer of intangible assets)—

(a)in sub-paragraph (1) for “Schedule 29 to FA 2002” substitute “Part 8 of CTA 2009”, and

(b)in sub-paragraph (2) for “Schedule”, in both places where it occurs, substitute “Part”.

(10)In paragraph 24 (neutral effect of transfer for loan relationships and derivative contracts)—

(a)in sub-paragraph (a) for “Chapter 2 of Part 4 of FA 1996” substitute “Part 5 of CTA 2009”, and

(b)in sub-paragraph (b) for “Schedule 26 to FA 2002” substitute “Part 7 of that Act”.

(11)In paragraph 34(6) (transfers of trading stock) for the words from “has” to the end substitute “has the meaning given by section 174 of ITTOIA 2005 (as respects income tax) or section 163 of CTA 2009 (as respects corporation tax).”

(12)In paragraph 40 (transfers involving private persons: loan relationships)—

(a)in sub-paragraph (1) for “Paragraph 11 of Schedule 9 to FA 1996” substitute “Section 444 of CTA 2009”, and

(b)in sub-paragraph (2) for “Chapter 2 of Part 4 of FA 1996” and “that Chapter” substitute “Part 5 of CTA 2009” and “that Part” respectively.

Section 1325

SCHEDULE 2Transitionals and savings

Part 1General provisions

Continuity of the law: general

1The repeal of provisions and their enactment in a rewritten form by this Act does not affect the continuity of the law.

2Paragraph 1 does not apply to any change made by this Act in the effect of the law.

3Any subordinate legislation or other thing which—

(a)has been made or done, or has effect as if made or done, under or for the purposes of a superseded enactment so far as it applied for relevant tax purposes, and

(b)is in force or effective immediately before the commencement of the corresponding rewritten provision,

has effect after that commencement as if made or done under or for the purposes of the rewritten provision.

4(1)Any reference (express or implied) in this Act, another enactment or an instrument or document to a rewritten provision is to be read as including, in relation to times, circumstances or purposes in relation to which any corresponding superseded enactment had effect for relevant tax purposes, a reference to the superseded enactment so far as applying for those relevant tax purposes.

(2)In particular, any reference (express or implied) in this Act, another enactment or an instrument or document to—

(a)the profits of a UK property business, or

(b)similar concepts created by this Act,

is to be read as including, in relation to times, circumstances or purposes in relation to which any corresponding concept in a superseded enactment had effect for corporation tax purposes, a reference to that concept so far as applying for corporation tax purposes.

(3)Any reference (express or implied) in this Act, another enactment or an instrument or document to—

(a)things done under or for the purposes of a rewritten provision, or

(b)things falling to be done under or for the purposes of a rewritten provision,

is to be read as including, in relation to times, circumstances or purposes in relation to which any corresponding superseded enactment had effect for relevant tax purposes, a reference to things done or falling to be done under or for the purposes of the superseded enactment so far as applying for those relevant tax purposes.

5(1)Any reference (express or implied) in any enactment, instrument or document to a superseded enactment in its application for relevant tax purposes is to be read, so far as is required for those relevant tax purposes, as including, in relation to times, circumstances or purposes in relation to which any corresponding rewritten provision has effect, a reference to the rewritten provision.

(2)In particular, any reference (express or implied) in any enactment, instrument or document to Schedule A or D or the Cases of Schedule D in their application for corporation tax purposes is to be read, so far as is required for corporation tax purposes, as including, in relation to times, circumstances or purposes in relation to which any corresponding rewritten concept has effect, as a reference to the rewritten concept.

(3)Any reference (express or implied) in any enactment, instrument or document to—

(a)things done under or for the purposes of a superseded enactment in its application for relevant tax purposes, or

(b)things falling to be done under or for the purposes of a superseded enactment in its application for relevant tax purposes,

is to be read, so far as is required for those relevant tax purposes, as including, in relation to times, circumstances or purposes in relation to which any corresponding rewritten provision has effect, a reference to things done or falling to be done under or for the purposes of the rewritten provision.

6Paragraphs 1 to 5 have effect instead of section 17(2) of the Interpretation Act 1978 (c. 30) (but are without prejudice to any other provision of that Act).

7Paragraphs 4 and 5 apply only so far as the context permits.

General saving for old transitional provisions and savings

8(1)The repeal by this Act of a transitional or saving provision relating to the coming into force of a provision rewritten in this Act does not affect the operation of the transitional or saving provision, so far as it is not specifically rewritten in this Act but remains capable of having effect in relation to the corresponding provision of this Act.

(2)The repeal by this Act of an enactment previously repealed subject to savings does not affect the continued operation of those savings.

(3)The repeal by this Act of a saving on the previous repeal of an enactment does not affect the operation of the saving so far as it is not specifically rewritten in this Act but remains capable of having effect.

Interpretation

9(1)In this Part—

  • “enactment” includes subordinate legislation (within the meaning of the Interpretation Act 1978 (c. 30)),

  • “relevant tax purposes” means, in relation to a superseded enactment, tax purposes for which the enactment has been rewritten by this Act, and

  • “superseded enactment” means an earlier enactment which has been rewritten by this Act for certain tax purposes (whether it applied only for those purposes or for those and other tax purposes).

(2)References in this Part to the repeal of a provision include references to its revocation and to its express or implied disapplication for corporation tax purposes.

(3)References in this Part to tax purposes are not limited to corporation tax purposes.

Part 2Changes in the law

10(1)This paragraph applies if, in the case of any person—

(a)a thing is done or an event occurs before 1 April 2009, and

(b)because of a change in the law made by this Act, the corporation tax consequences of that thing or event for the relevant period are different from what they would otherwise have been.

(2)This paragraph also applies if, in the case of any person—

(a)a thing is done or an event occurs before 6 April 2009, and

(b)because of a change in the law made by this Act, the income tax consequences of that thing or event for the relevant period are different from what they would otherwise have been.

(3)If the person mentioned in sub-paragraph (1) or (2) so elects, this Act applies with such modifications as may be necessary to secure that the corporation tax or (as the case may be) income tax consequences for the relevant period are the same as they would have been if the change in the law had not been made.

(4)In sub-paragraphs (1) to (3) “the relevant period” means—

(a)for corporation tax purposes, any accounting period beginning before and ending on or after 1 April 2009, and

(b)for income tax purposes, any period of account beginning before and ending on or after 6 April 2009.

(5)If this paragraph applies in the case of two or more persons in relation to the same thing or event, an election made under this paragraph by any one of those persons is of no effect unless a corresponding election is made by the other or each of the others.

(6)An election under this paragraph must be made—

(a)for corporation tax purposes, not later than two years after the end of the accounting period, and

(b)for income tax purposes, on or before the first anniversary of the normal self-assessment filing date for the tax year in which the period of account ends.

Part 3Charge to corporation tax on income

Effect of repeal of section 9(1) of ICTA on relevance of case law

11The repeal by this Act of section 9(1) of ICTA does not affect the relevance for corporation tax purposes of any case law that was relevant for those purposes immediately before the repeal.

Part 4Accounting periods

Companies in administration

12Section 10(1)(i) and (j), (2), (3) and (4) apply only in relation to companies that enter administration (under the Insolvency Act 1986 (c. 45) or otherwise) on or after 15 September 2003.

Part 5Company residence: exceptions to section 14

13(1)Subject to sub-paragraph (2), section 14 does not apply to a company if—

(a)immediately before 15 March 1988 the company was non-UK resident, having ceased to be UK resident under a Treasury consent, and

(b)immediately before 1 April 2009 section 66(1) of FA 1988 did not apply to the company because of paragraph 1(1) of Schedule 7 to that Act (certain companies which ceased to be UK resident before 15 March 1988 in pursuance of a Treasury consent).

(2)If at any time a company falling within sub-paragraph (1)—

(a)ceases to carry on business,

(b)becomes UK resident, or

(c)if the Treasury consent was a general consent, ceases to be taxable in a territory outside the United Kingdom,

section 14 applies in relation to the company after that time.

14(1)Subject to sub-paragraph (2), section 14 does not apply to a company if immediately before 1 April 2009 section 66(1) of FA 1988 did not apply to the company because of paragraph 2(1) of Schedule 7 to that Act (certain companies which ceased to be UK resident on or after 15 March 1988 in pursuance of a Treasury consent).

(2)If at any time a company falling within sub-paragraph (1)—

(a)ceases to carry on business, or

(b)becomes UK resident,

section 14 applies in relation to the company after that time.

15(1)In paragraph 13—

  • “general consent” means a consent under a section to which sub-paragraph (2) applies which is given generally within the meaning of subsection (4) of the section in question,

  • “taxable” means liable to tax on income by reason of domicile, residence or place of management,

  • “Treasury consent” means a consent under a section to which sub-paragraph (2) applies which is given for the purposes of subsection (1)(a) of the section in question.

(2)This sub-paragraph applies to the following sections (restrictions on the migration etc of companies)—

  • section 765 of ICTA,

  • section 482 of the Income and Corporation Taxes Act 1970,

  • section 468 of the Income Tax Act 1952, and

  • section 36 of FA 1951.

Part 6Trading income

Hiring cars with low CO2 emissions before 1 April 2013

16Section 58 does not apply to expenditure which is incurred on the hiring of a car mentioned in that section which is first registered before 17 April 2002.

17In relation to expenditure incurred on the hiring of a car—

(a)for a period of hire which began before 1 April 2008, and

(b)under a contract entered into before 1 April 2008,

section 58 (in which “car with low CO2 emissions” is defined by reference to section 45D of CAA 2001) applies as if section 45D(4) of CAA 2001 had not been amended by section 77 of FA 2008.

Tenants under taxed leases

18(1)This paragraph relates to the operation of sections 62 to 67 where, in respect of a lease—

(a)there is a receipt of a Schedule A business or an overseas property business (within the meaning of section 65A(4) or 70A(4) of ICTA) as a result of section 34 or 35 of ICTA (treatment of premiums etc as rent and assignments for profit of lease granted at an undervalue) for a tax year before the tax year 2005-06 or an accounting period ending before 1 April 2009, or

(b)there would be such a receipt, but for the operation of section 37(2) or (3) of ICTA (reductions in certain receipts under section 34 or 35 of ICTA).

In this paragraph and paragraphs 19 and 20 a receipt falling within paragraph (a) or (b) is referred to as an “ICTA pre-commencement receipt”.

(2)For the purposes of sections 62 to 67—

(a)the lease is treated as a taxed lease, and

(b)the ICTA pre-commencement receipt is treated as a taxed receipt.

(3)For the purposes of those sections, the “receipt period” of a taxed receipt which is an ICTA pre-commencement receipt is—

(a)in the case of an ICTA pre-commencement receipt as a result of section 34 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease, and

(b)in the case of an ICTA pre-commencement receipt as a result of section 35 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease remaining at the date of the assignment.

(4)For the purposes of sections 62 to 67 the “unreduced amount” of a taxed receipt which is an ICTA pre-commencement receipt is the amount of the ICTA pre-commencement receipt as a result of section 34 or 35 of ICTA, before the operation of section 37(2) or (3) of ICTA.

(5)Sub-paragraph (6) applies to a taxed receipt which is an ICTA pre-commencement receipt arising as a result of section 34(2) of ICTA (obligation on tenant to carry out work under lease).

(6)If the obligation to carry out work included the carrying out of work which gave or will give rise to expenditure for which an allowance has been, or may be, made under the enactments relating to capital allowances, the unreduced amount of the taxed receipt is calculated as if the obligation had not included the carrying out of that work.

19(1)This paragraph provides for the application of section 63 as a result of section 65 if—

(a)a lease is a taxed lease as a result of paragraph 18,

(b)another lease is granted out of the taxed lease,

(c)in calculating the amount of an ICTA pre-commencement receipt in respect of the other lease, there is a reduction under section 37(2) or (3) of ICTA by reference to the amount chargeable on the superior interest for the purposes of that section, and

(d)as a result of paragraph 18 the amount chargeable on the superior interest is the taxed receipt for the purposes of section 63.

(2)Sections 63 to 67 apply as follows—

(a)the ICTA pre-commencement receipt is treated as if it were a lease premium receipt for the purposes of sections 66 and 67,

(b)references in those sections to the reduction under section 228 by reference to the taxed receipt are, in relation to the ICTA pre-commencement receipt, to the reduction under section 37(2) or (3) of ICTA by reference to the amount chargeable on the superior interest, and

(c)for the purposes of those sections the receipt period of the ICTA pre-commencement receipt is—

(i)in the case of an ICTA pre-commencement receipt as a result of section 34 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease, and

(ii)in the case of an ICTA pre-commencement receipt as a result of section 35 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease remaining at the date of the assignment.

(3)References in this paragraph and paragraph 20 to a reduction under section 37(2) or (3) of ICTA in an ICTA pre-commencement receipt by reference to the amount chargeable on the superior interest are to the difference between—

(a)the amount of the ICTA pre-commencement receipt before the operation of section 37(2) or (3) of ICTA, and

(b)the amount of the receipt after the operation of that subsection,

so far as attributable to the amount chargeable on the superior interest for the purposes of section 37 of ICTA.

20(1)This paragraph provides for the application of section 63 as a result of section 65 if—

(a)the taxed lease referred to in those sections is a taxed lease as a result of section 227(4)(c) or (d) (lease taxed under ITTOIA 2005),

(b)another lease is granted out of the taxed lease, and

(c)in calculating the amount of an ICTA pre-commencement receipt in respect of the other lease, there is a reduction under section 37(2) or (3) of ICTA by reference to the amount chargeable on the superior interest for the purposes of that section.

(2)Sections 63 to 67 apply as follows—

(a)the ICTA pre-commencement receipt is treated as if it were a lease premium receipt for the purposes of sections 66 and 67,

(b)references in those sections to the reduction under section 228 by reference to the taxed receipt are, in relation to the ICTA pre-commencement receipt, to the reduction under section 37(2) or (3) of ICTA by reference to the amount chargeable on the superior interest, and

(c)for the purposes of those sections the receipt period of the ICTA pre-commencement receipt is—

(i)in the case of an ICTA pre-commencement receipt as a result of section 34 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease, and

(ii)in the case of an ICTA pre-commencement receipt as a result of section 35 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease remaining at the date of the assignment.

Local enterprise agencies

21To the extent that any function of the Scottish Ministers under section 79 of ICTA was, before 1 April 2009, also exercisable by the Secretary of State for the purposes specified in section 2(2) of the European Communities Act 1972 (c. 68) that function as rewritten in—

(a)section 83(2) (meaning of “local enterprise agency”),

(b)section 84 (approval of local enterprise agencies), or

(c)section 85 (supplementary provisions with respect to approvals),

continues to be also exercisable by the Secretary of State for those purposes.

Expenses connected with patents, designs and trade marks

22(1)This paragraph applies if—

(a)fees have been incurred, but not paid, for the purposes of a trade in connection with any of the matters mentioned in section 89 or 90,

(b)the fees were incurred in a period of account no part of which falls in an accounting period ending after 31 March 2009, and

(c)the fees have not been taken into account in calculating the profits of the trade of any accounting period.

(2)A deduction is allowed for the fees in calculating the profits of the period of account in which they are paid.

Payments to Export Credits Guarantee Department

23(1)This paragraph applies if—

(a)a sum is payable, but not paid, by the company carrying on a trade to the Export Credits Guarantee Department under an agreement mentioned in section 91(a) or with a view to entering into such an agreement,

(b)the sum was incurred in a period of account no part of which falls in an accounting period ending after 31 March 2009, and

(c)the sum has not been taken into account in calculating the profits of the trade of any accounting period.

(2)A deduction is allowed for the sum in calculating the profits of the period of account in which it is paid.

Reverse premiums

24(1)Sections 98 and 99 do not apply to a reverse premium—

(a)which was received before 9 March 1999, or

(b)to which the recipient was entitled immediately before that date.

(2)In determining whether a reverse premium was one to which the recipient was entitled immediately before 9 March 1999, no account is to be taken of any arrangements made on or after that date.

Sums recovered under insurance policies etc

25Section 103 does not apply if—

(a)a company carrying on a trade recovers a sum mentioned in that section, and

(b)the sum has been taken into account in calculating the profits of the trade of an accounting period ending before 1 April 2009.

Meaning of “designated educational establishment”

26To the extent that the power of the Welsh Ministers to make regulations under section 84(5) of ICTA was, before 1 April 2009, also exercisable by the Secretary of State for the purposes specified in section 2(2) of the European Communities Act 1972 (c. 68), that power as rewritten in section 106 continues to be also exercisable by the Secretary of State for those purposes.

27The reference in section 106(1)(a) to regulations made for England and Scotland by the Secretary of State includes a reference to regulations made for Great Britain by the Secretary of State before 1 July 1999.

Dealers in securities etc

28The repeal by this Act of section 473(2B) of ICTA (conversion etc of securities held as circulating capital) does not affect any election made under section 66 of FA 2002 (election to continue postponement of mark to market) before the repeal takes effect.

Purchase or sale of woodlands

29Section 134 does not apply if the purchase mentioned in subsection (2) of that section was made under a contract entered into before 1 May 1963.

Waste disposal

30If the predecessor ceased to carry on the trade carried on by the trader, or ceased to carry on a trade so far as relating to the site, before 21 March 2000, section 142 applies as if—

(a)“, or a predecessor,” in subsection (1) were omitted, and

(b)subsections (3) and (4) were omitted.

31If the trade carried on by the trader was started before 1 April 1993, section 144(1) (definition of “waste disposal licence”) applies for the purposes of sections 142 and 143 as if paragraphs (d) and (e) of that subsection were omitted (radioactive waste and nuclear site authorisations or licences).

32Section 144(3) does not apply for the purposes of sections 142 and 143 if the trade was started before 1 April 1993.

Reserves of marketing authorities etc

33In section 153(5) “approved scheme or arrangement” includes a scheme or arrangement—

(a)approved by the National Assembly for Wales, or

(b)made with the National Assembly for Wales,

before 26 May 2007.

Adjustment on change of basis

34Chapter 14 of Part 3 applies to a change of basis only if the first day of the first period of account for which the new basis is adopted falls within an accounting period that ends after 31 March 2009.

Part 7Property income

Lease premiums

35Section 217 does not apply in relation to a lease granted pursuant to a contract entered into before 4 April 1963.

Lease premiums: sums payable instead of rent

36Section 219 does not apply in relation to a lease granted—

(a)before 6 April 1963, or

(b)pursuant to a contract entered into before 4 April 1963.

Lease premiums: sums payable for surrender of lease

37Section 220 does not apply in relation to a lease granted—

(a)before 6 April 1963, or

(b)pursuant to a contract entered into before 4 April 1963.

Lease premiums: assignments for profit of lease granted at undervalue

38Section 222 does not apply in relation to a lease granted—

(a)before 6 April 1963, or

(b)pursuant to a contract entered into before 4 April 1963.

Lease premiums: pre-commencement receipts under ICTA treated as taxed receipts

39(1)This paragraph relates to the operation of sections 227 to 235 where, in respect of a lease—

(a)there is a receipt of a Schedule A business or an overseas property business (within the meaning of section 65A(4) or 70A(4) of ICTA) as a result of section 34 or 35 of ICTA (treatment of premiums etc as rent and assignments for profit of lease granted at an undervalue) for a tax year before the tax year 2005-06 or an accounting period ending before 1 April 2009, or

(b)there would be such a receipt, but for the operation of section 37(2) or (3) of ICTA (reductions in certain receipts under section 34 or 35 of ICTA).

In this paragraph and paragraph 40 a receipt falling within paragraph (a) or (b) is referred to as an “ICTA pre-commencement receipt”.

(2)For the purposes of Chapter 4 of Part 4—

(a)the lease is treated as a taxed lease, and

(b)the ICTA pre-commencement receipt is treated as a taxed receipt.

(3)For the purposes of that Chapter, the “receipt period” of a taxed receipt which is an ICTA pre-commencement receipt is—

(a)in the case of an ICTA pre-commencement receipt as a result of section 34 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease, and

(b)in the case of an ICTA pre-commencement receipt as a result of section 35 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease remaining at the date of the assignment.

(4)For the purposes of that Chapter the “unreduced amount” of a taxed receipt which is an ICTA pre-commencement receipt is the amount of the ICTA pre-commencement receipt as a result of section 34 or 35 of ICTA, before the operation of section 37(2) or (3) of ICTA.

(5)Sub-paragraph (6) applies to a taxed receipt which is an ICTA pre-commencement receipt arising as a result of section 34(2) of ICTA (obligation on tenant to carry out work under lease).

(6)If the obligation to carry out work included the carrying out of work which gave or will give rise to expenditure for which an allowance has been, or may be, made under the enactments relating to capital allowances, the unreduced amount of the taxed receipt is calculated as if the obligation had not included the carrying out of that work.

Lease premiums: taking account of reductions under section 37(2) or (3) of ICTA

40(1)This paragraph applies if—

(a)in calculating the amount of an ICTA pre-commencement receipt, there is a reduction under section 37(2) or (3) of ICTA by reference to the amount chargeable on the superior interest for the purposes of that section, and

(b)as a result of paragraph 39(1) and (2) or section 227(4)(c) or (d) (lease taxed under ITTOIA 2005) the amount chargeable on the superior interest is the taxed receipt for the purposes of Chapter 4 of Part 4.

(2)References to a reduction under section 37(2) or (3) of ICTA in an ICTA pre-commencement receipt by reference to the amount chargeable on the superior interest are to the difference between—

(a)the amount of the ICTA pre-commencement receipt before the operation of section 37(2) or (3) of ICTA, and

(b)the amount of the receipt after the operation of that subsection,

so far as attributable to the amount chargeable on the superior interest for the purposes of section 37 of ICTA.

(3)In sections 230(5)(a) (meaning of “unused amount”) and 235(3)(a) (limit on reductions and deductions) references to reductions under section 288 of ITTOIA 2005 by reference to the taxed receipt include references to reductions under section 37(2) or (3) of ICTA in ICTA pre-commencement receipts by reference to the amount chargeable on the superior interest.

(4)Sections 232 to 234 apply as follows—

(a)the ICTA pre-commencement receipt is treated as if it were a lease premium receipt for the purposes of sections 233 and 234,

(b)references in those sections to the reduction under section 228 by reference to the taxed receipt are, in relation to the ICTA pre-commencement receipt, to the reduction under section 37(2) or (3) of ICTA by reference to the amount chargeable on the superior interest, and

(c)for the purposes of those sections the receipt period of the ICTA pre-commencement receipt is—

(i)in the case of an ICTA pre-commencement receipt as a result of section 34 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease, and

(ii)in the case of an ICTA pre-commencement receipt as a result of section 35 of ICTA, the period treated in calculating the amount of the receipt as being the duration of the lease remaining at the date of the assignment.

Lease premiums: taking account of deductions for rent as a result of section 37(4) or 87(2) of ICTA

41(1)Sub-paragraph (2) applies if—

(a)in calculating the profits of a trade, profession or vocation for a tax year before the tax year 2005-06 or an accounting period ending before 1 April 2009, a person is treated as paying rent under section 87(2) of ICTA by reference to the amount chargeable for the purposes of that section, and

(b)as a result of paragraph 39(1) and (2) or section 227(4)(c) or (d) (lease taxed under ITTOIA 2005) the amount chargeable is the taxed receipt for the purposes of Chapter 4 of Part 4.

(2)References in sections 230(5)(b) and 235(3)(c) to the deductions allowed for expenses under section 63 by reference to the taxed receipt include references to the deductions allowed in calculating the profits of the trade, profession or vocation for the rent that the person is treated as paying under section 87(2) of ICTA by reference to the amount chargeable.

(3)Sub-paragraph (4) applies if—

(a)in calculating the profits of a Schedule A business or an overseas property business (within the meaning of section 65A(4) or 70A(4) of ICTA) for a tax year before the tax year 2005-06 or an accounting period ending before 1 April 2009, a person is treated as paying rent as a result of section 37(4) of ICTA by reference to the amount chargeable on the superior interest for the purposes of that section, and

(b)as a result of paragraph 39(1) and (2) or section 227(4)(c) or (d) (lease taxed under ITTOIA 2005) the amount chargeable on the superior interest is the taxed receipt for the purposes of Chapter 4 of Part 4.

(4)References in sections 230(5)(c) and 235(3)(b) to the deductions allowed for expenses under section 292 of ITTOIA 2005 by reference to the taxed receipt include references to the deductions allowed in calculating the profits of the Schedule A business or overseas property business (within the meaning of section 65A(4) or 70A(4) of ICTA) for the rent that the person is treated as paying as a result of section 37(4) of ICTA by reference to the amount chargeable on the superior interest.

Lease premiums: time limits for claims for repayment of tax

42(1)Until the Treasury by order appoints a day under this paragraph—

(a)section 238 has effect as if “6 years” were substituted for “4 years” in subsection (3) of that section, and

(b)section 239 has effect as if “6 years” were substituted for “4 years” in subsection (3) of that section.

(2)An order under this paragraph—

(a)may appoint different days for different purposes, and

(b)may include transitional provision and savings.

Lease premiums: rules for determining effective duration of lease

43(1)In relation to a lease granted after 24 August 1971 and before 1 April 2009, section 243 applies with the following modifications.

(2)In subsection (1) for Rule 1 substitute—

  • Rule 1: A lease is not to be treated as having been granted for a term longer than one ending on a date before the end of the term for which the lease was granted if—

    (a)

    the terms of the lease or any other circumstances make it unlikely that the lease will continue beyond that date, and

    (b)

    the premium was not substantially greater than it would have been had the term been one ending on that date.

(3)Omit subsection (3).

44The amendments made by paragraph 626 of Schedule 1 (amendments of section 303 of ITTOIA 2005, which provides rules for determining the effective duration of a lease) do not have effect in relation to leases granted before 1 April 2009.

45(1)In relation to a lease granted after 12 June 1969 and before 25 August 1971, for sections 243 and 244 substitute—

243Rules for determining effective duration of lease

(1)The following rules apply for determining the effective duration of a lease for the purposes of this Chapter.

  • Rule 1: Where the terms of a lease include provision for the determination of the lease by notice given by the landlord, the lease is not to be treated as granted for a term longer than one ending at the earliest date on which it could be determined by notice so given.

  • Rule 2: A lease is not to be treated as having been granted for a term longer than one ending on a date before the end of the term for which the lease was granted, if the terms of the lease or any other circumstances make it unlikely that the lease will continue beyond that date.

  • Rule 3: Where the terms of the lease include provision for the extension of the lease beyond a given date by notice given by the tenant, account may be taken of any circumstances making it likely that the lease will be so extended.

(2)Rule 2 applies by reference to the facts known or ascertainable at the time of the grant of the lease.

(3)In applying the rules, it is assumed that all parties concerned, whatever their relationship, act as if they were at arm’s length.

(4)In this section, in relation to Scotland, “term”, where referring to the duration of a lease, means period.

(2)This paragraph does not apply if the determination is for the purposes of section 221 (sums payable for variation or waiver of terms of lease).

46(1)In relation to a lease granted before 13 June 1969, for sections 243 to 245 substitute—

243Rules for determining effective duration of lease

(1)The following rules apply for determining the effective duration of a lease for the purposes of this Chapter.

  • Rule 1: Where the effective duration of a lease is being determined after the date on which the lease has for any reason come to an end, the duration is taken to have extended from its commencement to that date.

  • Rule 2: Where the terms of the lease include provision for the determination of the lease by notice given either by the landlord or by the tenant, the lease is not to be treated as granted for a term longer than one ending at the earliest date on which it could be determined by notice.

  • Rule 3: A lease is not to be treated as having been granted for a term longer than one ending on a date before the end of the term for which the lease was granted, if the terms of the lease or any other circumstances make it unlikely that the lease will continue beyond that date.

(2)Rules 2 and 3 are subject to Rule 1.

(3)Rules 2 and 3 apply in accordance with circumstances prevailing at the time of the determination.

(4)In this section, in relation to Scotland, “term”, where referring to the duration of a lease, means period.

(2)This paragraph does not apply if the determination is for the purposes of section 221 (sums payable for variation or waiver of terms of lease).

47The amendments made by paragraphs 498 and 506 of Schedule 1 (amendments of sections 291(3)(a) and 393J(3)(a) of CAA 2001) do not have effect in relation to leases granted before 1 April 2009.

Lease premiums: meaning of “premium”

48(1)In relation to a lease granted after 12 June 1969 and before 25 August 1971 sections 246 and 247 have effect with the following modifications.

(2)Section 246 has effect with the omission of subsections (4) and (5).

(3)Section 247 has effect with the omission of—

(a)the words “or to a person connected with such a person” in subsection (1), and

(b)subsection (2).

Reverse premiums

49(1)Section 250 does not apply to a reverse premium—

(a)which was received before 9 March 1999, or

(b)to which the recipient was entitled immediately before that date.

(2)In determining whether a reverse premium was one to which the recipient was entitled immediately before 9 March 1999, no account is to be taken of any arrangements made on or after that date.

Deductions for expenditure on energy-saving items

50Sections 251 to 253 do not apply to expenditure incurred before 8 July 2008.

Adjustment on change of basis

51(1)Sections 261 and 262 apply to a change of basis taking effect for a period of account which ends after 31 March 2009.

(2)For this purpose the period of account for which a change of basis takes effect is the first period of account for which the new basis is adopted.

Meaning of “mineral royalties”

52The definition of “mineral royalties” in section 274(2) does not include any rent receivable before 6 April 1970.

Part 8Loan relationships

Interpretation

53Except as provided in this Part of this Schedule, expressions used in this Part of this Schedule and in Part 5 of this Act have the same meaning as in Part 5.

Opening and closing values determined under Schedule 15 to the Finance Act 1996

54So far as immediately before the commencement of this Act any opening value or closing value is to be determined by reference to Schedule 15 to FA 1996 (loan relationships: savings and transitional provisions), the determination of that value is not affected by the repeal by this Act of any provision in that Schedule or any provision affecting such a provision.

References to Part 5 to include Schedule 15 to FA 1996

55Except where the context indicates otherwise, references to Part 5 of this Act in any enactment other than Schedule 15 to FA 1996 include references to that Schedule.

Exemption for interest on tax overpaid for accounting periods ending before 1 July 1999

56No liability to corporation tax arises in respect of interest paid under section 826(1) of ICTA (interest on tax overpaid) if the accounting period mentioned in the paragraph of that section as a result of which it is paid ends before 1 July 1999.

Regulations under section 81 of FA 2002

57The repeal by this Act of any provision in Schedule 23 to FA 2002 (transitional provision) does not affect the power in section 81 of that Act so far as relating to that provision.

Continuity on transfers: transferees becoming party to loan relationship before 9 April 2003

58(1)In determining whether Chapter 4 of Part 5 (continuity on transfers within groups or on reorganisations) applies in the case mentioned in section 336 or 337 where the transferee became party to the loan relationship before 9 April 2003, section 338 (meaning of company replacing another as party to loan relationship) applies with the following omissions.

(2)In subsection (1) omit paragraphs (b) and (c).

(3)In subsection (2) omit “or obligations”.

(4)Omit subsections (5) and (6).

(5)This paragraph must be read as if it were in Chapter 4 of Part 5.

Deeply discounted securities held before 1 October 2002

59(1)This sub-paragraph applies if—

(a)the condition in paragraph 17(1)(c) of Schedule 9 to FA 1996 (connection between issuing company and another company) is met as respects an accounting period beginning on or after 1 October 2002 as a result of the amendments made by paragraph 33 of Schedule 25 to FA 2002, but would not have been met in an accounting period beginning before that date, and

(b)the debtor relationship in question was a debtor relationship of the issuing company (within the meaning of section 407) on the first day of the company’s first accounting period beginning on or after that date.

(2)If sub-paragraph (1) applies, section 407 does not apply in relation to that debtor relationship as a result of those amendments.

(3)This sub-paragraph applies if section 409 applies in a case where—

(a)the relevant period began before 1 October 2002,

(b)as a result of paragraph 18 of Schedule 9 to FA 1996 an amount (“the deferred amount”) was not brought into account by a company for the purposes of Chapter 2 of Part 4 of that Act in respect of a debtor relationship for an accounting period beginning before that date, and

(c)the deeply discounted security concerned has not been redeemed before the beginning of the company’s first accounting period to which this Act applies.

(4)If sub-paragraph (3) applies, as regards any accounting period to which this Act applies, section 409(2) applies as if paragraph 18(2) of Schedule 9 to FA 1996, instead of preventing the bringing of amounts into account for any accounting period before that in which the security was redeemed, had provided for the deferred amount to be brought into account for the accounting period in which the security was redeemed rather than for the relevant period.

(5)In this paragraph—

  • “deeply discounted security” has the same meaning as in Chapter 8 of Part 4 of ITTOIA 2005 (profits from deeply discounted securities) (see section 430 of that Act), and

  • “the relevant period” has the same meaning as in section 409.

60(1)This paragraph applies if—

(a)an authorised unit trust or open-ended investment company holds a deeply discounted security on the last day of the unit trust’s or company’s last accounting period beginning before 1 October 2002 (“the last old day”),

(b)the security was not transferred or redeemed on that day,

(c)there is an amount which, if the unit trust or company had made a transfer of that security on that day, by selling it for its adjusted closing value—

(i)would have been charged under paragraph 1 of Schedule 13 to FA 1996 under Case III or IV of Schedule D, or

(ii)would have been eligible for relief from tax on a claim for the purposes of paragraph 2 of Schedule 13 to FA 1996, and

(d)that amount has not fallen to be brought into account under paragraph 64(3) of Schedule 25 to FA 2002.

(2)That amount must be brought into account as a non-trading credit, or (as the case may be) a non-trading debit, for the purposes of Part 5 (loan relationships) for the relevant accounting period.

(3)The relevant accounting period is the accounting period in which falls the earliest of—

(a)the first day that falls after the last old day and is a day on which, under the terms on which the security was issued, the holder of the security is entitled to require it to be redeemed,

(b)the day on which the security is redeemed, and

(c)the day on which the unit trust or company makes a disposal of the security.

(4)For the purposes of sub-paragraph (1)(c), the “adjusted closing value” of a deeply discounted security held by the unit trust or company on the last old day is the amount which for the purposes of Chapter 2 of Part 4 of FA 1996 was the opening value, as at the first day of the unit trust’s or company’s first accounting period beginning on or after 1 October 2002, of the unit trust’s or company’s rights and liabilities under the relationship represented by that security.

(5)Paragraph 5(7) of Schedule 15 to FA 1996 (determination of opening value where accruals basis of accounting is used) applies for the purposes of sub-paragraph (4) as it applies for the purposes of paragraph 5 of that Schedule, but—

(a)taking the reference to 1 April 1996 as a reference to the first day of the unit trust’s or company’s first accounting period beginning on or after 1 October 2002, and

(b)applying paragraph 4 of that Schedule (determination of amounts treated as accruing on or after 1 April 1996) (as it had effect immediately before 1 April 2009) for these purposes with the same modification.

(6)In this paragraph—

  • “creditor relationship” has the same meaning as in Part 5,

  • “deeply discounted security” has the same meaning as in that Chapter (see section 430 of that Act),

  • “open-ended investment company” has the same meaning as in section 468A of ICTA,

  • “redeem” means—

    (a)

    make a disposal, within the meaning of Chapter 8 of Part 4 of ITTOIA 2005 (profits from deeply discounted securities), except by a transfer within the meaning of that Chapter, or

    (b)

    convert as mentioned in section 437(1)(c) of that Act, and

  • “transfer” has the same meaning as in that Chapter.

(7)In this paragraph “the relevant period” has the same meaning as in section 409.

Restriction on bringing into account credits resulting from reversal of debits disallowed in a period of account beginning before 1 January 2005

61(1)No credit is to be brought into account for the purposes of Part 5 in respect of the reversal of a debit that was disallowed for tax purposes in a period of account beginning before 1 January 2005—

(a)because of the assumption required by paragraph 5(1) of Schedule 9 to FA 1996, or

(b)because the exceptions in section 74(1)(j) of ICTA did not apply.

(2)This paragraph does not apply if fair value accounting is used.

Disregard of pre-2005 disallowed debits

62(1)This paragraph applies if in a period of account of a company beginning before 1 January 2005 (“the earlier period”) a debit was disallowed for tax purposes—

(a)because of the assumption required by paragraph 5(1) of Schedule 9 to FA 1996, or

(b)because the exceptions in section 74(1)(j) of ICTA did not apply.

(2)The debit is ignored in determining the accounting value of an asset of the company at the end of the earlier period for the purposes of section 316 (change of accounting policy involving change of value).

Bringing into account losses on overseas sovereign debt etc

63(1)This paragraph applies if at the end of the last period of account of a company before paragraph 17(1)(b) of Schedule 4 to FA 2005 (which repealed paragraph 9 of Schedule 9 to FA 1996) had effect—

(a)the company had ceased to be a party to a loan relationship, and

(b)the effect of paragraph 9 of Schedule 9 to FA 1996 (restrictions on bringing into account losses on overseas sovereign debt) (or a corresponding earlier enactment) was that part of the loss arising had not been brought into account for tax purposes.

(2)Despite the repeal by this Act of paragraph 17(3) of Schedule 4 to FA 2005, any debit that, as a result of that paragraph, immediately before its repeal could have been brought into account for the purposes of Chapter 2 of Part 4 of FA 1996 (loan relationships) under paragraph 9(4) or (5) of Schedule 9 to FA 1996 in a subsequent period of account of the company may be brought into account in such a period for the purposes of Part 5 (loan relationships).

Saving for old elections for treating loan relationships with embedded derivatives as two assets

64(1)The repeal by this Act of paragraph 7 of Schedule 6 to F(No.2)A 2005 (loan relationships with embedded derivatives) does not affect—

(a)any election made under that paragraph immediately before the repeal takes effect, or

(b)any election which immediately before the repeal takes effect had effect as if so made as a result of sub-paragraph (8) of that paragraph (elections made under paragraph 28(3) of Schedule 4 to FA 2005).

(2)This Act applies to those elections as if they had been made under section 416 (election for application of sections 415 and 585).

Deeply discounted securities of close companies: discounts for accounting periods beginning before 1 April 2007

65(1)This paragraph applies as regards a debtor relationship entered into in pursuance of a contract—

(a)made before 4 March 2005, and

(b)not varied after that date, or not varied until after that date.

(2)A debit is not allowed or required, as a result of the amendments made by paragraph 3(2) and (4) to (7) of Schedule 8 to F(No.2)A 2005, to be brought into account under Part 5 for an accounting period in respect of any amount of discount in respect of which a debit is so brought into account for any earlier accounting period.

(3)In sub-paragraph (2) “earlier accounting period” means an accounting period that began before—

(a)1 April 2007, or

(b)if the contract mentioned in sub-paragraph (1) was varied before that date, the date of variation.

(4)The references in this paragraph to the variation of a contract do not include references to a variation that does not affect the terms of the debtor relationship in question.

Repo, stock lending and other transactions before 1 October 2007: disapplication of section 332

66Section 332 (repo, stock lending and other transactions) does not apply in relation to cases where there is—

(a)an arrangement to which Chapter 10 of Part 6 would apply if the arrangement had not come into force before 1 October 2007,

(b)a stock lending arrangement (within the meaning of section 263B(1) of TCGA 1992), which came into force before that date and under which the lender transfers securities to the borrower otherwise than by way of sale, or

(c)any other disposal before that date.

Avoidance relying on continuity of treatment provisions: transactions before 16 May 2008

67Section 347 (disapplication of Chapter 4 of Part 5 where transferor party to avoidance) does not have effect in relation to transactions taking place, or a series of transactions of which the first takes place, before 16 May 2008.

Disposals for consideration not fully recognised by accounting practice: disposals before 16 May 2008

68Section 455 (disposals for consideration not fully recognised by accounting practice) does not have effect in relation to disposals before 16 May 2008.

5½% Treasury Stock 2008-2012 not redeemed before 6 April 2009

69(1)This paragraph applies if any loan relationship of a company—

(a)is represented by any 5½% Treasury Stock 2008-2012, and

(b)is one to which the company is a party otherwise than in the course of activities that form an integral part of a trade it carries on.

(2)No amounts fall to be brought into account for the purposes of Part 5 in respect of the loan relationship unless they relate to interest.

References to Companies Act 2006

70Until section 658 of the Companies Act 2006 (c. 46) (rule against limited company acquiring own shares) comes into force, references to that section in sections 421(4)(g)(ii) and 431(7)(b) have effect as if they were references to section 143 of the Companies Act 1985 (c. 6).

Prospective repeal of provisions concerning exchange gains and losses from loan relationships

71(1)The following provisions (which rewrite provisions prospectively repealed by F(No.2)A 2005 or are related to such provisions) cease to have effect—

(a)section 306(2)(e) (introduction to section 328),

(b)section 310(5) (power to make regulations about recognised amounts: exception for exchange gains and losses),

(c)section 328 (exchange gains and losses),

(d)section 384 (treatment of exchange gains and losses),

(e)section 450(6) (meaning of “corresponding debtor relationship”: disregard of section 328(2) to (7)), and

(f)section 151F of TCGA 1992 (exchange gains and losses from loan relationships: regulations).

(2)For the power to make an order bringing this paragraph into force, see section 1329(3).

Part 9Relationships treated as loan relationships

Relevant non-lending relationships: discounts accruing and profits arising before 16 March 2005

72(1)None of the following is to be brought into account for the purposes of Part 5 as a result of any of the provisions specified in sub-paragraph (2) or any reference to that provision in any other provision—

(a)credits in respect of a discount arising from a money debt, so far as the discount accrued before 16 March 2005,

(b)credits in respect of profits arising as mentioned in 481(3)(c) or (5)(c) where the related transaction took place before that date,

(c)debits in respect of any impairment arising in respect of a discount arising from a money debt, so far as the discount accrued before that date,

(d)credits in respect of any reversal of any such impairment, so far as the discount accrued before that date.

(2)The provisions are—

(a)section 480 (relevant non-lending relationships involving discounts),

(b)section 481(3)(c) and (5) to (8) (application of Part 5 to relevant non-lending loan relationships), and

(c)section 482(2) (miscellaneous rules about amounts to be brought into account because of Chapter 2 of Part 6).

(3)This paragraph is to be read as if it were in Chapter 2 of Part 6.

Alternative finance arrangements entered into before 6 April 2005

73(1)Chapter 6 of Part 6 (alternative finance arrangements) only applies to alternative finance arrangements entered into before 6 April 2005 (“pre-6 April 2005 arrangements”) if they are relevant deposit arrangements and then only so far as provided by this paragraph.

(2)In this paragraph “relevant deposit arrangements” means deposit arrangements under which alternative finance return is payable on or after 6 April 2005.

(3)For the purposes of Part 5 (loan relationships) the loan that is treated under section 509 (application of Part 5: general) as made by or to a company that is party to the pre-6 April 2005 arrangements is a loan made on 6 April 2005 of an amount equal to the notional carrying value of the asset or liability representing the arrangements.

(4)For the purposes of sub-paragraph (3) that notional carrying value is the amount that would have been the carrying value of the asset or liability in the accounts of the company (prepared in accordance with generally accepted accounting practice) if a period of account had ended immediately before 6 April 2005.

Profit share agency arrangements entered into before 1 April 2006

74(1)Chapter 6 of Part 6 (alternative finance arrangements) only applies to profit share agency arrangements entered into before 1 April 2006 (“pre-1 April 2006 arrangements”) if they are relevant profit share agency arrangements and then only so far as provided by this paragraph.

(2)In this paragraph “relevant profit share agency arrangements” means profit share agency arrangements under which alternative finance return is payable on or after 1 April 2006.

(3)For the purposes of Part 5 (loan relationships) the loan that is treated under section 509 (application of Part 5: general) as made by or to a company that is party to the pre-1 April 2006 arrangements is a loan made on 1 April 2006 of an amount equal to the notional carrying value of the asset or liability representing the arrangements.

(4)For the purposes of sub-paragraph (3) that notional carrying value is the amount that would have been the carrying value of the asset or liability in the accounts of the company (prepared in accordance with generally accepted accounting practice) if a period of account had ended immediately before 1 April 2006.

Investment bond arrangements entered into before 1 April 2007

75(1)Chapter 6 of Part 6 (alternative finance arrangements) only applies to investment bond arrangements entered into before 1 April 2007 (“pre-1 April 2007 arrangements”) if they are relevant investment bond arrangements and then only so far as provided by this paragraph.

(2)In this paragraph “relevant investment bond arrangements” means investment bond arrangements under which alternative finance return is payable on or after 1 April 2007.

(3)For the purposes of Part 5 (loan relationships) the loan that is treated under section 509 (application of Part 5: general) as made by or to a company that is party to the pre-1 April 2007 arrangements is a loan made on 1 April 2007 of an amount equal to the notional carrying value of the asset or liability representing the arrangements.

(4)For the purposes of sub-paragraph (3) that notional carrying value is the amount that would have been the carrying value of the asset or liability in the accounts of the company (prepared in accordance with generally accepted accounting practice) if a period of account had ended immediately before 1 April 2007.

Shares with guaranteed returns: redeemable shares where public issue before 22 March 2006

76In relation to any case where the public issue (within the meaning of section 530(4) and (5)) is before 22 March 2006 for “7 days” in subsections (4)(b) and (5)(a) of section 530 (the redemption return condition: excepted shares) substitute “24 hours”.

Shares with guaranteed returns: income-producing assets for the increasing value condition

77In relation to any time before 16 May 2008, section 527(4) (meaning of “income-producing assets” for the purposes of the increasing value condition) applies with the substitution for paragraph (c) of the following paragraph—

(c)any share as respects which the redemption return condition is met or would be met apart from section 529(1)(c) (excepted shares),.

Repo transactions and stock lending arrangements before 1 October 2007

78(1)Chapter 10 of Part 6 (repos) does not apply in relation to an arrangement which came into force before 1 October 2007.

(2)The repeal by this Act of paragraph 15 of Schedule 9 to FA 1996 (repo transactions and stock-lending) does not affect its application in relation to cases where there is—

(a)an arrangement to which Chapter 10 of Part 6 would apply if the arrangement had not come into force before 1 October 2007,

(b)a stock lending arrangement (within the meaning of section 263B(1) of TCGA 1992), which came into force before that date and under which the lender transfers securities to the borrower otherwise than by way of sale, or

(c)any other disposal before that date.

(3)But that paragraph applies with the substitution—

(a)for references to Chapter 2 of Part 4 of FA 1996 of references to Part 5 of this Act, and

(b)for the reference in sub-paragraph (5) to section 84 of that Act of a reference to section 304 of this Act.

Part 10Derivative contracts

Interpretation

79Expressions used in this Part of this Schedule and in Part 7 of this Act have the same meaning as in Part 7.

Extended meaning of reference in section 591(6)(b)

80The reference in section 591(6)(b) (condition E) to the provisions in section 591(7) includes a reference to paragraphs 82 and 86 of this Schedule.

Disapplication of section 645

81Section 645 (creditor relationships: embedded derivatives which are options) does not apply to a derivative contract of a company for an accounting period if the asset representing the creditor relationship is an asset in relation to which paragraph 9(2) of Schedule 10 to FA 2004 has effect.

Existing assets representing creditor relationships: options

82(1)This paragraph applies if section 645 would apply to a derivative contract of a company for an accounting period but for the fact that the asset representing the creditor relationship is an asset in relation to which paragraph 9(2) of Schedule 10 to FA 2004 has effect.

(2)Section 574 (non-trading credits and debits to be brought into account under Part 5) does not apply to the credits and debits which are given in relation to the derivative contract for the accounting period by section 595.

(3)The asset representing the creditor relationship is treated for corporation tax purposes as not being a qualifying corporate bond.

(4)For the purposes of corporation tax on chargeable gains, the amount or value of the consideration for any disposal by the company of the asset representing the creditor relationship is reduced by so much of that amount or value as, on a just and reasonable apportionment, relates to interest within sub-paragraph (5).

(5)Interest is within this sub-paragraph if—

(a)it falls to be brought into account under Part 5 of this Act (loan relationships) as accruing to any company at any time, and

(b)in consequence of, or of the terms of, the disposal, it is not paid or payable to the company to which it is treated for the purposes of that Part as accruing.

(6)For the purposes of corporation tax on chargeable gains, the amount or value of the consideration for any disposal by the company of the asset mentioned in sub-paragraph (4)—

(a)is increased by the addition of any relevant exchange losses, and

(b)is (after giving effect to any such increase) reduced (but not below nil) by the deduction of any relevant exchange gains.

(7)If the amount of the relevant exchange gains falling to be deducted under sub-paragraph (6)(b) exceeds the amount required to reduce the amount or value of the consideration to nil, the excess is treated for the purposes of section 38(1)(c) of TCGA 1992 as incidental costs of the disposal of the asset mentioned in sub-paragraph (4).

83(1)This paragraph applies for the purposes of paragraph 82.

(2)“Relevant exchange gains” means an amount within sub-paragraph (4) or (5).

(3)“Relevant exchange losses” means an amount which would be within sub-paragraph (4) or (5) if references in those sub-paragraphs to exchange gains were read as references to exchange losses.

(4)An amount is within this sub-paragraph if it is the amount of any exchange gains in respect of the asset mentioned in paragraph 82(4) which are brought into account under Part 5 of this Act (loan relationships) by the company for an accounting period throughout which the company holds that asset.

(5)For any accounting period not within sub-paragraph (4) in which the company holds that asset, an amount is within this sub-paragraph if it is an amount which, on a just and reasonable apportionment, represents so much of the amount of any exchange gains brought into account under that Part in respect of that asset by the company for that period as is referable to the part of the period for which the company holds that asset.

84(1)This paragraph applies if—

(a)there has been a reorganisation for the purposes of sections 126 to 132 of TCGA 1992, and

(b)for the purposes of those sections, the asset mentioned in paragraph 82(4) is treated as the original shares.

(2)The reference in paragraph 82(4) to the disposal of that asset is a reference to the disposal of the asset which, as a result of the reorganisation, has become the new holding for the purposes of those sections.

Disapplication of section 648

85Section 648 (creditor relationships: embedded derivatives which are exactly tracking contracts for differences) does not apply to a derivative contract of a company for an accounting period if the asset representing the creditor relationship is an asset in relation to which paragraph 11(2) of Schedule 10 to FA 2004 has effect.

Existing assets representing creditor relationships: contracts for differences

86(1)This paragraph applies if section 648 would apply to a derivative contract of a company for an accounting period but for the fact that the asset representing the creditor relationship is an asset in relation to which paragraph 11(2) of Schedule 10 to FA 2004 has effect.

(2)Section 574 (non-trading credits and debits to be brought into account under Part 5) does not apply to the credits and debits which are given in relation to the derivative contract for the accounting period by section 595.

(3)The asset representing the creditor relationship is treated for corporation tax purposes as not being a qualifying corporate bond.

(4)For the purposes of corporation tax on chargeable gains, the amount or value of the consideration for any disposal by the company of the asset representing the creditor relationship is reduced by so much of that amount or value as, on a just and reasonable apportionment, relates to interest within sub-paragraph (5).

(5)Interest is within this sub-paragraph if—

(a)it falls to be brought into account under Part 5 of this Act (loan relationships) as accruing to any company at any time, and

(b)in consequence of, or of the terms of, the disposal, it is not paid or payable to the company to which it is treated for the purposes of that Part as accruing.

87(1)This paragraph applies if—

(a)there has been a reorganisation for the purposes of sections 126 to 132 of TCGA 1992, and

(b)for the purposes of those sections, the asset mentioned in paragraph 86(4) is treated as the original shares.

(2)The reference in paragraph 86(4) to the disposal of that asset is a reference to the disposal of the asset which, as a result of the reorganisation, has become the new holding for the purposes of those sections.

Disapplication of section 658

88(1)Section 658 (chargeable gain or allowable loss treated as accruing) does not apply to a derivative contract of a company for an accounting period if the liability representing the debtor relationship was owed by the company immediately before its first accounting period to begin on or after 1 January 2005.

(2)If section 658 would apply to a derivative contract for an accounting period but for sub-paragraph (1), section 574 (non-trading credits and debits to be brought into account under Part 5) does not apply to the credits and debits which are given in relation to the derivative contract for the accounting period by section 595.

Disapplication of section 661

89Section 661 (contract which becomes derivative contract) does not apply if the relevant contract became a derivative contract before 30 December 2006.

Disapplication of section 666

90Section 666 (allowable loss treated as accruing) does not apply to a company if the liability representing the debtor relationship was owed by the company immediately before its first accounting period to begin on or after 1 January 2005.

Contracts which became derivative contracts on 16 March 2005

91(1)This paragraph applies in relation to a company if conditions A, B and C are met in relation to a relevant contract.

(2)Condition A is that the company was a party to the relevant contract both immediately before and at 3.00pm on 16 March 2005.

(3)Condition B is that the relevant contract—

(a)was not a derivative contract immediately before 3.00pm on that date, but

(b)has been a derivative contract as from that time.

(4)Condition C is that the relevant contract was a chargeable asset immediately before that time.

(5)If the company ceases to be a party to the contract, it must bring into account for the accounting period in which it so ceases the amount of any chargeable gain or allowable loss which would have been treated as accruing to it on the assumptions in sub-paragraph (6).

(6)Those assumptions are that—

(a)the company disposed of the contract immediately before 3.00pm on 16 March 2005, and

(b)the disposal was for consideration of an amount equal to the value (if any) given to the contract in the accounts of the company at the end of the company’s accounting period immediately before its first accounting period—

(i)beginning on or after 1 January 2005, and

(ii)ending on or after 16 March 2005.

Contracts which became derivative contracts on 28 July 2005

92(1)This paragraph applies in relation to a company if conditions A, B and C are met in relation to a relevant contract.

(2)Condition A is that the company was a party to the contract both immediately before and on 28 July 2005.

(3)Condition B is that the contract—

(a)was not a derivative contract immediately before that date, but

(b)apart from this paragraph, would have been a derivative contract on that date if an accounting period of the company began on that date.

(4)Condition C is that the contract was a chargeable asset immediately before that date.

(5)The relevant contract is treated for the purposes of Part 7 of this Act as a derivative contract entered into by the company on 28 July 2005 for consideration of an amount equal to the fair value of the contract on that date.

(6)If the company ceases to be a party to the contract, it must bring into account for the accounting period in which it so ceases the amount of any chargeable gain or allowable loss which would have been treated as accruing to it on the assumptions in sub-paragraph (7).

(7)Those assumptions are that—

(a)the company disposed of the contract immediately before 28 July 2005, and

(b)the disposal was for consideration of an amount equal to the fair value of the contract on that date.

Plain vanilla contracts which became derivative contracts before 30 December 2006

93(1)This paragraph applies if—

(a)a company is a party to a plain vanilla contract which (not having been a derivative contract) became a derivative contract before 30 December 2006,

(b)the company disposes of the derivative contract by ceasing to be a party to it, and

(c)paragraphs 91 and 92 do not apply in relation to the contract.

(2)Section 699(1) (priority of this Part for corporation tax purposes) does not apply for the purpose of calculating any chargeable gain accruing to the company on the disposal.

(3)For the purpose of calculating any chargeable gain accruing to the company on the disposal, the sums allowable as a deduction under section 38(1)(a) of TCGA 1992 (acquisition costs) are—

(a)if G exceeds L, increased by the amount of that excess,

(b)if L exceeds G, reduced by the amount of that excess.

(4)If the amount of the excess in sub-paragraph (3)(b) is greater than the amount of the expenditure allowable under section 38(1)(a) of TCGA 1992, the amount of the excess which cannot be deducted from the expenditure so allowable is, for the purpose mentioned in sub-paragraph (3), added to the consideration for the disposal.

(5)In this paragraph—

  • G is the sum of the credits brought into account under section 574 of this Act (non-trading credits and debits to be brought into account under Part 5) in respect of the derivative contract in each relevant accounting period, and

  • L is the sum of the debits brought into account under that section in respect of the derivative contract in each such period.

(6)In sub-paragraph (5) “relevant accounting period” means—

(a)the accounting period in which the disposal is made, or

(b)any previous accounting period.

Issuers of securities with embedded derivatives: deemed options

94(1)This paragraph applies if the company mentioned in section 652(1) was a party to the debtor relationship mentioned in section 652(2) immediately before its first accounting period to begin on or after 1 January 2005.

(2)Section 653 (shares issued or transferred as a result of exercise of deemed option) does not apply.

(3)If section 654(2) (payment instead of disposal on exercise of deemed option) applies—

(a)CV is taken to be nil, and

(b)an allowable loss of an amount equal to X is treated as accruing to the company in the accounting period mentioned in section 654(2).

(4)Section 655 (ceasing to be party to debtor relationship when deemed option not exercised) does not apply.

Contract becoming derivative contract on 12 March 2008

95(1)This paragraph applies if a company was, immediately before 12 March 2008, a party to a relevant contract which became a derivative contract by virtue of the amendments made by paragraph 20 of Schedule 22 to FA 2008.

(2)The contract is to be regarded for the purposes of Part 7 as having been entered into by the company on 12 March 2008 for consideration of an amount equal to its notional carrying value (within the meaning of section 622) on that date.

Avoidance relying on continuity of treatment provisions: transactions before 16 May 2008