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 [F1 company] carrying on a trade the profits of which are chargeable [F2 to corporation tax] 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 [F3 a company with investment business] 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.

Textual Amendments

F1 Word in s. 93(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 72(a) (with Sch. 2)

F2 Words in s. 93(1) inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 72(b) (with Sch. 2)

F3 Words in s. 93(1) substituted (28.9.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 (S.I. 2004/2310), art. 1(2), Sch. para 11(2)

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.

[F4 (1)] M12 Where, in computing for [F5 corporation tax purposes] the [F6 profits] of a [F7 trade or profession], a deduction has been allowed for any debt incurred for the purposes of the [F7 trade or profession], then, if the whole or any part of the debt is thereafter released [F8 otherwise than as part of a [F9 statutory insolvency arrangement]], the amount released shall be treated as a receipt of the [F7 trade or profession] arising in the period in which the release is effected.

(2) F10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F4 S. 94 renumbered as s. 94(1) (3.5.1994) by virtue of Finance Act 1994 (c. 9), s. 144(4)

F5 Words in s. 94(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 73(a) (with Sch. 2)

F6 Words in s. 94(1) substituted (31.7.1998) by Finance Act 1998 (c. 36), s. 46(3)(a)(b), Sch. 7 para. 1

F7 Words in s. 94(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 73(b) (with Sch. 2)

F8 Words in s. 94(1) inserted (with effect in accordance with s. 144(7) of the amending Act) by Finance Act 1994 (c. 9), s. 144(3)(a)

F9 Words in s. 94(1) substituted (with effect in accordance with s. 80(3)(4) of the amending Act) by Finance Act 2005 (c. 7), Sch. 4 para. 4(2)

F10 S. 94(2) repealed (with effect in accordance with s. 80(3)(4) of the repealing Act) by Finance Act 2005 (c. 7), Sch. 4 para. 4(3), Sch. 11 Pt. 2(5), Note

Marginal Citations

M12 SOURCE-1970 s. 136

95 [F11 Taxation of dealers in respect of distributions etc.] U.K.

[F12 [F13 (1) Where a dealer—

(a) receives a relevant distribution, that is to say—

(i) any distribution which is made by a company resident in the United Kingdom (“a UK distribution”), or

(ii) any payment which is representative of a UK distribution, or

(b) makes any payment which is representative of a UK distribution,

the distribution or, as the case may be, the payment shall be taken into account in computing the profits of the dealer which are chargeable to [F14 corporation tax] in accordance with the provisions of this Act applicable to Case I or II of Schedule D.]

(1A) Accordingly, where a dealer receives a [F15 relevant distribution]—

(a) F16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) F17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) [F18 section 208] shall not apply to that distribution; and

(d) F19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F20 (e) F21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(1B) F22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F23 (1C) The application of subsection (1) above in relation to a payment made by a dealer is subject to paragraph 7A of Schedule 23A (manufactured payments under arrangements having an unallowable purpose).]

(2) For the purposes of this section a person is a dealer in relation to any F24 . . . distribution if—

(a) were there a sale by that person of the shares [F25 or stock] in respect of which the distribution is made, and

(b) the circumstances of that sale were such that the price would not fall to be treated as a F24 . . . distribution,

the price would be taken into account in computing the profits of that person which are chargeable to [F26 corporation tax] in accordance with the provisions of this Act applicable to Case I or II of Schedule D.]

[F27 (2A) The reference in subsection (2) above to the profits of a person does not include the profits of that person in respect of insurance business or any category of insurance business.]

(4) F28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) F28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F11 S. 95 sidenote substituted (with effect in accordance with s. 24(15) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), s. 24(9)

F12 S. 95(1)(1A)(1B)(2) substituted for s. 95(1)-(3) (with effect in accordance with Sch. 7 para. 8(3) of the amending Act) by Finance Act 1997 (c. 16), Sch. 7 para. 8(1)

F13 S. 95(1) substituted (with effect in accordance with s. 24(15) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), s. 24(2)

F14 Words in s. 95(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 74(2) (with Sch. 2)

F15 Words in s. 95(1A) substituted (with effect in accordance with s. 24(15) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), s. 24(3)(a)

F16 S. 95(1A)(a) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 74(3), Sch. 3 (with Sch. 2)

F17 S. 95(1A)(b) repealed (with effect in accordance with s. 24(15) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), s. 24(3)(b), Sch. 8 Pt. 2(8), Note 1

F18 Words in s. 95(1A)(c) substituted (with effect in accordance with s. 24(15) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), s. 24(3)(c)

F19 S. 95(1A)(d) repealed (with effect in accordance with s. 24(15) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), s. 24(3)(d), Sch. 8 pt. 2(8), Note 1

F20 S. 95(1A)(e) inserted (with effect in accordance with s. 24(15) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), s. 24(3)(e)

F21 S. 95(1A)(e) repealed (with effect in accordance with Sch. 43 Pt. 3(6) Note of the repealing Act) by Finance Act 2003 (c. 14), Sch. 43 Pt. 3(6)

F22 S. 95(1B) repealed (with effect in accordance with s. 24(15) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), s. 24(4), Sch. 8 Pt. 2(8), Note 1

F23 S. 95(1C) inserted (2.7.2004) by Finance Act 2004 (c. 12), s. 137(2)(6)

F24 Words in s. 95(2) repealed (with effect in accordance with s. 24(15) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), s. 24(5)(a), Sch. 8 Pt. 2(8), Note 1

F25 Words in s. 95(2)(a) inserted (with effect in accordance with s. 24(15) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), s. 24(5)(b)

F26 Words in s. 95(2) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 74(4) (with Sch. 2)

F27 S. 95(2A) inserted (with effect in accordance with s. 24(15) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), s. 24(6)

F28 S. 95(4)(5) repealed (with effect in accordance with s. 24(15) of the repealing Act) by Finance (No. 2) Act 1997 (c. 58), s. 24(7)(8). {Sch. 8 Pt. 2(8)}

[F29 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

F29 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)