Income and Corporation Taxes Act 1988

Treatment of regional development and other grants and debts released etc. U.K.

92 Regional development grants. U.K.

(1) M1 A regional development grant which, apart from this subsection, would be taken into account as a receipt in computing the profits of a trade, profession or vocation which are chargeable under Case I or II of Schedule D, shall not be taken into account as a receipt in computing those profits.

(2) M2 A regional development grant which is made to an investment company—

(a) shall not be taken into account as a receipt in computing its profits under Case VI of Schedule D; and

(b) shall not be deducted, by virtue of section 75(2), from the amount treated as expenses of management.

(3) In this section “regional development grant” means a payment by way of grant under Part II of the M3 Industrial Development Act 1982.

Marginal Citations

M1 SOURCE-1984 s. 54(1), (4)

M2 SOURCE-1984 s. 54(2), (3)

M3 1982 c. 52.

93 Other grants under Industrial Development Act 1982 etc. U.K.

(1) M4 A payment to which this section applies which is made to a person carrying on a trade the profits of which are chargeable under Case I of Schedule D shall be taken into account as a receipt in computing those profits; and any such payment which is made to an investment company shall be taken into account as a receipt in computing its profits under Case VI of Schedule D.

(2) M5 This section applies to any payment which would not, apart from this section, be taken into account as mentioned in subsection (1) above, being a payment by way of a grant under—

(a) section 7 or 8 of the Industrial Development Act 1982 or section 7 or 8 of the M6 Industry Act 1972; or

(b) section 1 of the M7 Industries Development Act (Northern Ireland) 1966 or section 4 of the M8 Industries Development Act (Northern Ireland) 1971; or

(c) M9 any of Articles 7, 9 and 30 of the M10 Industrial Development (Northern Ireland) Order 1982;

other than a grant designated as made towards the cost of specified capital expenditure or as made by way of compensation for the loss of capital assets and other than a grant falling within subsection (3) below.

(3) M11 A payment by way of grant which is made—

(a) under Article 7 of the Order referred to in subsection (2)(c) above, and

(b) in respect of a liability for corporation tax (including a liability which has already been met),

shall not be taken into account as mentioned in subsection (1) above, whether by virtue of this section or otherwise.

Marginal Citations

M4 SOURCE-1980 s. 42(1)

M5 SOURCE-1980 s. 42(2)

M6 1972 c. 63.

M7 1966 c. 36 (N.I.).

M8 1971 c. 22 (N.I.).

M9 SOURCE-1980 s. 42(2); 1984 s. 55(1)

M10 S.I. 1982/1083 (N.I. 15).

M11 SOURCE-1980 s. 42(3); 1984 s. 55(2)

94 Debts deducted and subsequently released. U.K.

M12 Where, in computing for tax purposes the profits or gains of a trade, profession or vocation, a deduction has been allowed for any debt incurred for the purposes of the trade, profession or vocation, then, if the whole or any part of the debt is thereafter released, the amount released shall be treated as a receipt of the trade, profession or vocation arising in the period in which the release is effected.

Marginal Citations

M12 SOURCE-1970 s. 136

95 Taxation of dealer’s receipts on purchase by company of own shares. U.K.

(1) M13 Where a company purchases its own shares from a dealer, the purchase price shall be taken into account in computing the profits of the dealer chargeable to tax under Case I or II of Schedule D; and accordingly—

(a) tax shall not be chargeable under Schedule F in respect of any distribution represented by any part of the price, and

(b) the dealer shall not be entitled in respect of the distribution to a tax credit under section 231, and

(c) sections 208 and 234(1) shall not apply to the distribution.

(2) For the purposes of subsection (1) above a person is a dealer in relation to shares of a company if the price received on their sale by him otherwise than to the company would be taken into account in computing his profits chargeable to tax under Case I or II of Schedule D.

(3) Subject to subsection (4) below, in subsection (1) above—

(a) the reference to the purchase of shares includes a reference to the redemption or repayment of shares and to the purchase of rights to acquire shares, and

(b) the reference to the purchase price includes a reference to any sum payable on redemption or repayment.

(4) Subsection (1) above shall not apply in relation to—

(a) the redemption of fixed-rate preference shares, or

(b) the redemption, on terms settled or substantially settled before 6th April 1982, of other preference shares issued before that date,

if in either case the shares were issued to and continuously held by the person from whom they are redeemed.

(5) In this section—

• “fixed-rate preference shares” means shares which—

  (a)

  were issued wholly for new consideration, and

  (b)

  do not carry any right either to conversion into shares or securities of any other description or to the acquisition of any additional shares or securities, and

  (c)

  do not carry any right to dividends other than dividends which—

  (i)

  are of a fixed amount or at a fixed rate per cent. of the nominal value of the shares, and

  (ii)

  together with any sum paid on redemption, represent no more than a reasonable commercial return on the consideration for which the shares were issued;

• “new consideration” has the meaning given by section 254; and

• “shares” includes stock.

Marginal Citations

M13 SOURCE-1982 s. 54

Yn ddilys o 21/07/2008

[F1 95ZA Taxation of UK distributions received by insurance companies U.K.

(1) If the total amount of relevant distributions received by a company in an accounting period exceeds £50,000, those distributions are to be taken into account in calculating for corporation tax purposes the profits of the company in that period (and accordingly section 208 does not apply in relation to those distributions).

(2) A company (“company A”) receives a “relevant distribution” if—

(a) it receives a distribution made by a company resident in the United Kingdom (“company B”),

(b) the value of the shares or stock in respect of which the distribution is made (“the holding”) is materially reduced by reason of the distribution,

(c) a profit on the sale of the holding (to anyone other than company B) would be taken into account in calculating company A's profits in respect of relevant insurance business, and

(d) either—

(i) the holding amounts to, or is an ingredient in a holding amounting to, 10% of all holdings of the same class in company B, or

(ii) the period between the acquisition by company A of the holding and that company first taking steps to dispose of the holding does not exceed 30 days.

(3) In this section “relevant insurance business” means any kind of insurance business other than life assurance business.

(4) Section 177(7) of TCGA 1992 (provision supplementing provision corresponding to subsection (2)(d)(i) above) applies for the purposes of subsection (2)(d)(i).

(5) Section 731(4) below (interpretation of “taking steps to dispose of securities”) applies for the purposes of subsection (2)(d)(ii) as if the reference to the securities were to the holding.]

Textual Amendments

F1 S. 95ZA inserted (with effect in accordance with Sch. 17 para. 16(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 17 para. 16(1)