GeneralU.K.
1(1)The company shall be assumed to be resident in the United Kingdom.
(2)Nothing in sub-paragraph (1) above requires it to be assumed that there is any change in the place or places at which the company carries on its activities.
(3)For the avoidance of doubt, it is hereby declared that, if any sums forming part of the company’s profits for an accounting period have been received by the company without any deduction of or charge to tax [F1and have been so received by virtue of section 154(2) of the Finance Act 1996] the effect of the assumption in sub-paragraph (1) above is that those sums are to be brought within the charge to tax for the purposes of calculating the company’s chargeable profits or corresponding United Kingdom tax.
[F2(3A)In any case where—
(a)it is at any time necessary for any purpose of Chapter IV of Part XVII to determine the chargeable profits of the company for an accounting period, and
(b)at that time—
(i)no direction has been given under section 747(1) with respect to that or any earlier accounting period of the company, and
(ii)it has not been established that that or any earlier accounting period of the company is an ADP exempt period,
in determining the chargeable profits of the company for the accounting period mentioned in paragraph (a) above it shall be assumed, for the purpose of any of the following provisions of this Schedule which refer to the first accounting period in respect of which a direction is given under section 747(1) or which is an ADP exempt period, that that period (but not any earlier period) is an accounting period in respect of which such a direction is given or which is an ADP exempt period.]
(4)In any case where—
(a)it is at any time necessary for any purpose of Chapter IV of Part XVII to determine the chargeable profits of the company for an accounting period, and
(b)at that time no direction has been given under section 747(1) with respect to that or any earlier accounting period of the company,
[F3in determining the chargeable profits of the company for the accounting period mentioned in paragraph (a) above] it shall be assumed, for the purpose of any of the following provisions of this Schedule which refer to the first accounting period in respect of which a direction is given under that section, that such a direction has been given for that period (but not for any earlier period).
(5)Nothing in this Schedule affects any liability for, or the computation of, corporation tax in respect of a trade which is carried on by a company resident outside the United Kingdom through a branch or agency in the United Kingdom.
[F4(6)Any reference in this Schedule to an “ADP exempt period”, in the case of any company, is a reference to an accounting period of the company—
(a)which begins on or after 28th November 1995; and
(b)in respect of which the company pursued, within the meaning of Part I of Schedule 25, an acceptable distribution policy.]
Textual Amendments
F1Words in Sch. 24 para. 1(3) substituted (with effect in accordance with s. 154(9) of the amending Act) by Finance Act 1996 (c. 8), Sch. 28 para. 6
F2Sch. 24 para. 1(3A) inserted (with effect in accordance with s. 182 of the amending Act) by Finance Act 1996 (c. 8), Sch. 36 para. 3(2)
F3Words in Sch. 24 para. 1(4) inserted (retrospectively) by Finance Act 1995 (c. 4), Sch. 25 para. 6(1)(2)
F4Sch. 24 para. 1(6) inserted (with effect in accordance with s. 182 of the amending Act) by Finance Act 1996 (c. 8), Sch. 36 para. 3(3)
2(1)The company shall be assumed to have become resident in the United Kingdom (and, accordingly, within the charge to corporation tax) at the beginning of the first accounting period—
[F5(a)in respect of which a direction is given under section 747(1), or
(b)which is an ADP exempt period,
and] that United Kingdom residence shall be assumed to continue throughout subsequent accounting periods of the company (whether or not a direction is given in respect of all or any of them) until the company ceases to be controlled by persons resident in the United Kingdom.
(2)Except in so far as the following provisions of this Schedule otherwise provide, for the purposes of calculating a company’s chargeable profits or corresponding United Kingdom tax for any accounting period which is not the first such period referred to in sub-paragraph (1) above (and, in particular, for the purpose of applying any relief which is relevant to two or more accounting periods), it shall be assumed that a calculation of chargeable profits or, as the case may be, corresponding United Kingdom tax has been made for every previous accounting period throughout which the company was, by virtue of sub-paragraph (1) above, assumed to have been resident in the United Kingdom.
Textual Amendments
F5Words in Sch. 24 para. 2(1) substituted (with effect in accordance with s. 182 of the amending Act) by Finance Act 1996 (c. 8), Sch. 36 para. 3(4)
3U.K.The company shall be assumed not to be a close company.
4(1)Subject to sub-paragraph (2) below, where any relief under the Corporation Tax Acts is dependent upon the making of a claim or election, the company shall be assumed to have made that claim or election which would give the maximum amount of relief and to have made that claim or election within any time limit applicable to it.
[F6(1A)Sub-paragraph (2) below applies to any accounting period of the company—
(a)in respect of which a direction is given under section 747(1); or
(b)which is an ADP exempt period.]
(2)[F7Where this sub-paragraph applies to an accounting period of the company, then] if, by notice given to the Board at any time not later than the expiry of [F8the appropriate period] or within such longer period as the Board may in any particular case allow, the United Kingdom resident company which has or, as the case may be, any two or more United Kingdom resident companies which together have, a majority interest in the company so request, the company shall be assumed—
(a)not to have made any claim or election specified in the notice; or
(b)to have made a claim or election so specified, being different from one assumed by sub-paragraph (1) above but being one which (subject to compliance with any time limit) could have been made in the case of a company within the charge to corporation tax; or
(c)to have disclaimed or required the postponement, in whole or in part, of an allowance if (subject to compliance with any time limit) a company within the charge to corporation tax could have disclaimed the allowance or, as the case may be, required such a postponement.
[F9(2A)For the purposes of sub-paragraph (2) above, “the appropriate period”—
(a)in the case of an accounting period in respect of which a direction is given under section 747(1), means the time for the making of an appeal under section 753; and
(b)in the case of an accounting period which is an ADP exempt period, means the period of twenty months following the end of the accounting period.]
(3)For the purposes of this paragraph, a United Kingdom resident company has, or two or more United Kingdom resident companies together have, a majority interest in the company if on the apportionment of the company’s chargeable profits for the relevant accounting period under section 747(3) more than half of the amount of those profits—
(a)which are apportioned to all United Kingdom resident companies, and
(b)which give rise to an assessment on any such companies under subsection (4)(a) of that section,
are apportioned to the United Kingdom resident company or companies concerned.
[F10(3A)Sub-paragraph (3) above shall apply in relation to an accounting period which is an ADP exempt period as it would apply if—
(a)that accounting period had instead been one in respect of which a direction had been duly given under section 747(1), and
(b)such apportionments and assessments as are mentioned in sub-paragraph (3) above had been made.]
(4)In sub-paragraph (3) above “the relevant accounting period” means the accounting period or, as the case may be, the first accounting period in which the relief in question is or would be available in accordance with sub-paragraph (1) above.
Textual Amendments
F6Sch. 24 para. 4(1A) inserted (with effect in accordance with s. 182 of the amending Act) by Finance Act 1996 (c. 8), Sch. 36 para. 3(5)
F7Words in Sch. 24 para. 4(2) inserted (with effect in accordance with s. 182 of the amending Act) by Finance Act 1996 (c. 8), Sch. 36 para. 3(6)(a)
F8Words in Sch. 24 para. 4(2) substituted (with effect in accordance with s. 182 of the amending Act) by Finance Act 1996 (c. 8), Sch. 36 para. 3(6)(b)
F9Sch. 24 para. 4(2A) inserted (with effect in accordance with s. 182 of the amending Act) by Finance Act 1996 (c. 8), Sch. 36 para. 3(7)
F10Sch. 24 para. 4(3A) inserted (with effect in accordance with s. 182 of the amending Act) by Finance Act 1996 (c. 8), Sch. 36 para. 3(8)
Modifications etc. (not altering text)
C1Sch. 24 para. 4(3)(4) applied (with modifications) (23.3.1995) by The Exchange Gains and Losses (Alternative Method of Calculation of Gain or Loss) Regulations 1994 (S.I. 1994/3227), regs. 1(2), 6
[F114AU.K.F12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]
Textual Amendments
F11Sch. 24 para. 4A inserted (27.7.1993 with effect as mentioned in s. 96(2) of the amending act in relation to any accounting period on or after such day as may be appointed under s. 165(7)(b) of the amending Act) by 1993 c. 34, ss. 96(1)(2), 165(7)(b)
F12Sch. 24 para. 4A deemed never to have been inserted, by virtue of Finance Act 1995 (c. 4), Sch. 25 para. 6(3), Sch. 29 Pt. 8(18), Note