Corporation Tax Act 2009 (c. 4)

SCHEDULES

Section 1322

SCHEDULE 1 U.K. Minor and consequential amendments

Part 1 U.K. Income and Corporation Taxes Act 1988

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

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

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

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

(4) Omit subsection (4A).

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

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

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

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

(4) Omit subsection (6).

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

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

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

8 U.K. Omit section 15 (Schedule A).

9 U.K. Omit section 18 (Schedule D).

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

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

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

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

(2) In subsection (1)—

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

(b) omit the definition of “premium”.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

23 U.K. Omit section 70 (basis of assessment etc).

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

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

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

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

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

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

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

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

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

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

(5) At Step 2 in subsection (7)—

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

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

(6) At Step 3 in subsection (7)—

(a) omit the entries relating to—

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

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

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

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

(b) at the end insert—

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

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

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

31 U.K. After section 76 insert—

“Payments for restrictive undertakings U.K.

76ZA Payments for restrictive undertakings

(1) This section applies if a payment—

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

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

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

32 U.K. After section 76ZA insert—

“Seconded employees U.K.

76ZB Employees seconded to charities and educational establishments

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

(a) a charity, or

(b) an educational establishment,

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

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

(3) In this section—

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

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

33 U.K. After section 76ZB insert—

“Counselling and retraining expenses U.K.

76ZC Counselling and other outplacement services

(1) This section applies if—

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

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

(c) the relevant conditions are met.

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

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

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

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

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

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

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

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

34 U.K. After section 76ZC insert—

“76ZD Retraining courses

(1) This section applies if—

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

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

(c) the relevant conditions are met.

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

(3) In this section—

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

• “the relevant conditions” means—

  (a)

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

  (b)

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

35 U.K. After section 76ZD insert—

“76ZE Retraining courses: recovery of tax

(1) This section applies if—

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

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

(2) If, subsequently—

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

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

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

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

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

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

(b) the employee's continued employment, or

(c) the employee's re-employment,

within 60 days of coming to know of it.

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

(a) the failure to begin the course,

(b) the continued employment, or

(c) the re-employment.

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

36 U.K. After section 76ZE insert—

“Redundancy payments etc U.K.

76ZF Redundancy payments and approved contractual payments

(1) Sections 76ZG to 76ZI apply if—

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

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

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

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

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

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

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

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

  (a)

  section 157 of the Employment Rights Act 1996, or

  (b)

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

37 U.K. After section 76ZF insert—

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

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

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

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

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

38 U.K. After section 76ZG insert—

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

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

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

(b) partly in one or more other capacities.

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

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

(b) the employment in the other capacities.

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

39 U.K. After section 76ZH insert—

“76ZI Additional payments

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

(a) the redundancy payment, or

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

(2) If—

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

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

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

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

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

(a) the redundancy payment, or

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

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

40 U.K. After section 76ZI insert—

“76ZJ Payments by the Government

(1) This section applies if—

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

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

(2) This subsection applies to—

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

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

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

(a) a redundancy payment, or

(b) an approved contractual payment,

made by the employer.”

41 U.K. After section 76ZJ insert—

“Contributions to local enterprise organisations or urban regeneration companies U.K.

76ZK Contributions to local enterprise organisations or urban regeneration companies

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

(a) to a local enterprise organisation, or

(b) to an urban regeneration company.

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

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

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

(b) is entitled to receive such a benefit,

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

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

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

(b) from anyone else.

(5) Subsection (6) applies if—

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

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

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

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

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

(7) In this section—

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

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

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

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

42 U.K. After section 76ZK insert—

“Unpaid remuneration U.K.

76ZL Unpaid remuneration

(1) This section applies if—

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

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

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

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

(3) But—

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

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

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

43 U.K. After section 76ZL insert—

“76ZM Unpaid remuneration: supplementary

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

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

(a) particular employments, or

(b) employments generally.

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

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

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

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

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

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

(5) In this section and section 76ZL—

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

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

44 U.K. After section 76ZM insert—

“Car or motor cycle hire U.K.

76Z Car or motor cycle hire

(1) Subsection (2) applies if—

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

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

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

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

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

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

(a) subsequently—

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

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

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

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

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

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

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

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

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

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

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

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

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

F1 45 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1 Sch. 1 para. 45 omitted (with effect in accordance with Sch. 11 paras. 65-67 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 11 para. 64(b)

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

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

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

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

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

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

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

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

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

55 U.K. Omit section 84 (gifts to educational establishments).

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

(2) In subsection (2)—

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

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

(c) omit paragraph (c).

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

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

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

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

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

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

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

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

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

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

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

67 U.K. Omit section 91 (cemeteries).

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

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

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

71 U.K. Omit section 92 (regional development grants).

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

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

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

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

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

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

78 U.K. Omit section 99 (dealers in land).

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

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

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

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

83 U.K. Omit section 110 (interpretation etc).

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

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

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

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

(3) Omit subsection (5).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(3) After subsection (6) insert—

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

In this subsection “relevant alternative finance return”—

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

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

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

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

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

(3) For subsection (1B) substitute—

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

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

“Industrial and provident society dividends etc U.K.

230A Dividend or bonus granted by industrial and provident society

(1) This section applies if—

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

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

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

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

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

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

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

(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. U.K.

(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. U.K.

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

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

(4) For subsection (9) substitute—

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

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

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

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

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

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

(3) In subsection (2)—

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

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

(4) In subsection (3)—

(a) for paragraph (a) substitute—

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

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

(5) In subsection (4)—

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

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

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

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

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

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

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

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

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

(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. U.K.

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

(3) In subsection (8)—

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

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

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

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

(d) after paragraph (b) insert “; or

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

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

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

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

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

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

(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. U.K.

(2) In subsection (2)—

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

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

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

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

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

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

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

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

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

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

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

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

(3) In subsection (3)—

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

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

(4) In subsection (4)—

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

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

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

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

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

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

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

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

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

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

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

124 U.K. After section 411 insert—

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

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

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

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

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

(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. U.K.

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

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

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

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

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

(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. U.K.

(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. U.K.

(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. U.K.

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

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

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

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

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

(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. U.K.

(2) For subsection (1) substitute—

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

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

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

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

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

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

(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. U.K.

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

(3) In subsection (4)—

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

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

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

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

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

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

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

(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. U.K.

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

(3) In subsection (2)—

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

(b) omit “(a “Case VI loss”)”.

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

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

144 U.K. In section 444ABD(1A) (transferor's period of account including transfer)—

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

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

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

(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. U.K.

(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. U.K.

(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. U.K.

(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. U.K.

(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. U.K.

(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. U.K.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

164 U.K. Omit section 487 (credit unions).

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

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

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

(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. U.K.

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

(3) In subsection (5)—

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

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

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

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

(2) For subsection (3)(b) substitute—

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

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

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

that accounting period.”

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

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

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

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

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

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

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

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

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

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

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

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

(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),

F2 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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 ”.

Textual Amendments

F2 Sch. 1 para. 174(4)(c) omitted (with effect in accordance with Sch. 14 para. 31 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 14 para. 30(e)

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

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

“(a) section 105 of CTA 2009,”.

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

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

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

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

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

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

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

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

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

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

181 U.K. Omit section 526 (relief for expenses).

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

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

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

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

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

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

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

(a) omit “section 74 of this Act or”,

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

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

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

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

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

(3) After subsection (1A) insert—

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

191 U.K. Omit section 577 (business entertaining expenses).

192 U.K. Omit section 577A (expenditure involving crime).

193 U.K. Omit section 578 (housing grants).

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

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

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

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

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

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

200 U.K. Omit section 588 (training courses for employees).

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

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

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

204 U.K. Omit section 695 (limited interests in residue).

205 U.K. Omit section 696 (absolute interests in residue).

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

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

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

209 U.K. In section 700 (adjustments and information)—

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

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

(c) in subsection (5)—

(i) omit paragraph (a),

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

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

(d) after subsection (6) insert—

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

210 U.K. Omit section 701 (interpretation).

211 U.K. Omit section 702 (application to Scotland).

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

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

F3 214 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F3 Sch. 1 para. 214 omitted (with effect in accordance with Sch. 25 para. 10 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 25 para. 9(3)(i)

F4 215 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F4 Sch. 1 para. 215 omitted (retrospective and with effect in accordance with Sch. 24 paras. 12, 13-16 of the commencing Act) by virtue of Finance Act 2009 (c. 10), Sch. 24 paras. 9(f), 12

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

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

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

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

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

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

(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. U.K.

(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. U.K.

(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. U.K.

(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. U.K.

(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. U.K.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

F5 230 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F5 Sch. 1 para. 230 omitted (with effect in accordance with Sch. 25 para. 10 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 25 para. 9(3)(i)

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

(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. U.K.

(2) For subsection (10) substitute—

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

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

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

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

(3) In subsection (13)—

(a) omit paragraph (a),

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

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

(d) after paragraph (d) insert—

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

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

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

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

(3) After subsection (1A) insert—

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

(4) In subsection (4)—

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

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

(c) after paragraph (c) insert—

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

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

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

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

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

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

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

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

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

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

(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. U.K.

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

(3) Omit subsection (1A).

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

(5) Omit subsection (3).

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

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

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

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

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

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

(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. U.K.

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

(3) In subsection (2)—

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

(b) omit “and gains”.

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

(5) In subsection (5)—

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(3) After subsection (4) insert—

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

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

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

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

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

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

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

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

(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 ”.

F6 252 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F6 Sch. 1 paras. 252-254 omitted (with effect in accordance with Sch. 14 para. 31 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 14 para. 30(e)

F6 253 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F6 Sch. 1 paras. 252-254 omitted (with effect in accordance with Sch. 14 para. 31 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 14 para. 30(e)

F6 254 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F6 Sch. 1 paras. 252-254 omitted (with effect in accordance with Sch. 14 para. 31 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 14 para. 30(e)

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

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

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

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

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

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

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

257 U.K. After section 807A insert—

“European cross-border transfers of business U.K.

807B Introduction to section 807C

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

(2) Condition A is that—

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

(b) the transfer includes—

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

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

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

(3) Condition B is that—

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

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

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

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

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

(f) the transfer—

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(9) In this section and section 807C—

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

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

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

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

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

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

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

258 U.K. After section 807B insert—

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

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

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

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

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

(3) Subsection (1) does not apply if—

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

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

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

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

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

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

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

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

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

259 U.K. After section 807C insert—

“European cross-border mergers U.K.

807D Introduction to section 807E

(1) Section 807E applies if—

(a) conditions A to E,

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

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

are met.

(2) Condition A is that—

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

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

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

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

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

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

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

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

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

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

(c) the transfer of intangible fixed assets—

(i) that are chargeable intangible assets in relation to company A immediately before the transfer, and

(ii) in the case of one or more of which the proceeds of realisation exceed the cost recognised for tax purposes.

(7) Condition F is that—

(a) the transfer of assets and liabilities to the transferee in the course of the merger is made in exchange for the issue of shares or debentures by the transferee to each person holding shares in or debentures of a transferor, or

(b) paragraph (a) is not met in relation to the transfer of those assets and liabilities only because, and only so far as, the transferee is prevented from so issuing such shares or debentures by section 658 of the Companies Act 2006 (general rule against limited company acquiring own shares) or by a corresponding provision of the law of another member State preventing such an issue.

(8) Condition G is that in the course of the merger each transferor ceases to exist without being in liquidation (within the meaning given by section 247 of the Insolvency Act 1986).

(9) In the case of a merger within subsection (2)(a) or (b), in determining whether section 807E applies in respect of such a transfer as is mentioned in subsection (6)(c), condition D is regarded as met even if all liabilities relating to the business which company A carried on are not transferred as mentioned in subsection (5).

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

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

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

(11) In this section and section 807E—

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

• “co-operative society” means a society registered under the Industrial and Provident Societies Act 1965 or a similar society governed by the law of a member State other than the United Kingdom,

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

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

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

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

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

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

• “SE” and “SCE” have the same meaning as in CTA 2009 (see section 1319 of that Act)),

• “the transferee” means—

  (a)

  in relation to a merger within subsection (2)(a), the SE,

  (b)

  in relation to a merger within subsection (2)(b), the SCE,

  (c)

  in relation to a merger within subsection (2)(c) or (d), the company to which assets and liabilities are transferred, and

• “transferor” means—

  (a)

  in relation to a merger within subsection (2)(a), a company merging to form the SE,

  (b)

  in relation to a merger within subsection (2)(b), a co-operative society merging to form the SCE, and

  (c)

  in relation to a merger within subsection (2)(c) or (d), a company transferring all of its assets and liabilities.

(12) In section 807E, “company A”, “the merger” and “the merging companies” have the same meaning as in this section.”

260 U.K. After section 807D insert—

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

(1) If tax would have been chargeable under the law of one or more other member States in respect of the transfer mentioned in section 807D(6)(a), (b) or (c) but for the Mergers Directive, this Part, including any arrangements having effect by virtue of section 788, is to apply as if that tax had been chargeable.

(2) In calculating tax notionally chargeable under subsection (1) in respect of the transfer mentioned in section 807D(6)(a) or (b), it is to be assumed—

(a) that to the extent permitted by the law of the other member State losses arising on that transfer are set against gains arising on that transfer, and

(b) that any relief due to company A under that law is claimed.

(3) Subsection (1) does not apply if—

(a) the merger is not effected for genuine commercial reasons, or

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

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

(a) any of the merging companies has applied to the Commissioners for Her Majesty's Revenue and Customs, and

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

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

261 U.K. After section 807E insert—

“Transparent entities involved in cross-border transfers and mergers U.K.

807F Introduction to section 807G

(1) Section 807G applies if, as a result of—

(a) a relevant loan relationship transaction,

(b) a relevant derivative contracts transaction, or

(c) a relevant intangible fixed assets transaction,

tax would have been chargeable under the law of a member State other than the United Kingdom in respect of a relevant profit but for the Mergers Directive.

(2) In this section “relevant loan relationship transaction” means—

(a) a transfer of a kind which meets condition A or B in section 421 of CTA 2009 or would meet one of those conditions if—

(i) the business or part of the business transferred were carried on by the transferor in the United Kingdom, and

(ii) the condition in section 421(3)(c) or (4)(f) of that Act were met,

and in relation to which the transferor or transferee or one of the transferees is a transparent entity, or

(b) a merger of a kind mentioned in section 431(2) of that Act which meets—

(i) conditions B to D in section 431,

(ii) in the case of a merger within section 431(3)(a), (b) or (c), condition E in section 431, and

(iii) in the case of a merger within section 431(3)(c) or (d), condition F in section 431,

and in relation to which one or more of the merging companies is a transparent entity.

(3) In this section “relevant derivative contracts transaction” means—

(a) a transfer of a kind which meets condition A or B in section 674 of CTA 2009 or would meet one of those conditions if—

(i) the business or part of the business transferred were carried on by the transferor in the United Kingdom, and

(ii) the condition in section 674(2)(c) or (3)(f) of that Act were met,

and in relation to which the transferor is a transparent entity, or

(b) a merger of a kind mentioned in section 682(2) of that Act which meets—

(i) conditions B to D in section 682,

(ii) in the case of a merger within section 682(2)(a), (b) or (c), condition E in section 682, and

(iii) in the case of a merger within section 682(2)(c) or (d), condition F in section 682,

and in relation to which one or more of the merging companies is a transparent entity.

(4) In this section “relevant intangible fixed assets transaction” means—

(a) a transfer—

(i) which is of a kind which meets condition A or B in section 819 of CTA 2009, or would meet one of those conditions if the business or part of the business transferred were carried on by the transferor in the United Kingdom, and

(ii) in relation to which the transferor or transferee or one of the transferees is a transparent entity, or

(b) a merger—

(i) which is of a kind mentioned in section 821(2) of that Act,

(ii) which meets conditions B and C in section 821,

(iii) which, if it is a merger within section 821(2)(a), (b) or (c), meets condition D in section 821,

(iv) which, if it is a merger within section 821(2)(c) or (d), meets condition E in section 821,

(v) in the course of which no qualifying assets are transferred to which section 818 (company reconstruction involving transfer of business) applies, and

(vi) in relation to which one or more of the merging companies is a transparent entity.

(5) In this section “relevant profit” means—

(a) in the case of a transfer within subsection (2)(a), a profit accruing to a transparent entity in respect of a loan relationship (or which would be treated as accruing if it were not transparent) because of the transfer of assets or liabilities representing a loan relationship by the transparent entity to the transferee,

(b) in the case of a merger within subsection (2)(b), a profit accruing to a transparent entity in respect of a loan relationship (or which would be treated as accruing if it were not transparent) because of the transfer of assets or liabilities representing a loan relationship by the transparent entity to another company in the course of the merger,

(c) in the case of a transfer within subsection (3)(a), a profit accruing to a transparent entity in respect of a derivative contract (or which would be treated as accruing if it were not transparent) because of the transfer of rights and liabilities under the derivative contract by the transparent entity to the transferee,

(d) in the case of a merger within subsection (3)(b), a profit accruing to a transparent entity in respect of a derivative contract (or which would be treated as accruing if it were not transparent) because of the transfer of rights and liabilities under the derivative contract by the transparent entity to another company in the course of the merger,

(e) in the case of a transfer within subsection (4)(a), a profit which would be treated as accruing to a transparent entity in respect of an intangible fixed asset, because of the transfer of intangible fixed assets by the transparent entity, if it were not transparent,

(f) in the case of a merger within subsection (4)(b), a profit which would be treated as accruing to a transparent entity in respect of an intangible fixed asset, because of the transfer of intangible fixed assets by the transparent entity in the course of the merger, if it were not transparent.

(6) In this section and section 807G—

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

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

• “intangible fixed assets” has the same meaning as in Part 8 of CTA 2009,

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

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

• “transparent entity” means a company which is resident in a member State other than the United Kingdom and does not have an ordinary share capital.”

262 U.K. After section 807F insert—

“807G Tax treated as chargeable in respect of relevant transactions

(1) This Part, including any arrangements having effect by virtue of section 788, is to apply as if the tax that would have been chargeable as mentioned in section 807F(1) had been chargeable.

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

(a) that to the extent permitted by the law of the other member State mentioned in section 807F(1) losses arising on the relevant transfer are set against profits arising on it, and

(b) that any relief available under that law is claimed.

(3) In this section “the relevant transfer” means—

(a) the transfer of assets or liabilities mentioned in paragraph (a) or (b) of section 807F(5),

(b) the transfer of rights and liabilities mentioned in paragraph (c) or (d) of that section, or

(c) the transfer of intangible fixed assets mentioned in paragraph (e) or (f) of that section.”

263 U.K. In section 811(3) (deduction for foreign tax where no credit allowable)—

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

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

264 U.K. In section 815AZA (UK residents and foreign enterprises) for subsection (4) substitute—

“(4) This section does not apply in relation to—

(a) income of a person resident in the United Kingdom to which section 858 of ITTOIA 2005 applies, or

(b) income of a company resident in the United Kingdom to which section 1266 of CTA 2009 applies.”

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

266 U.K. In section 821(1)(a) (under-deductions from payments made before passing of annual Act) omit “under under Case III of Schedule D”.

267 (1) Amend section 826 (interest on tax overpaid) as follows. U.K.

(2) In subsection (1)—

(a) in paragraph (d) for “Schedule 20 to the Finance Act 2000” substitute “ Chapter 2 or 7 of Part 13 of CTA 2009 ”,

(b) omit paragraph (da), and

(c) in paragraph (e) for “Schedule 22 to the Finance Act 2001” substitute “ Part 14 of CTA 2009 ”.

(3) Omit subsection (3AA).

(4) Omit subsections (5) and (5A).

(5) In subsection (7C)—

(a) in paragraph (b) for “section 83(2)(c) of the Finance Act 1996 or paragraph 4(3) of Schedule 11 to that Act” substitute “ section 389(1) or 459(1)(b) of CTA 2009 ”, and

(b) in the words following paragraph (c) for “section 83(2)(c) of that Act or, as the case may be, paragraph 4(3) of Schedule 11 to that Act” substitute “ section 389(1) or 459(1)(b) of CTA 2009 ”.

(6) In subsection (8A)—

(a) in paragraph (a) for “(d), (da)” substitute “ , (d) ”, and

(b) in paragraph (b)(ii), omit “, tax credit under Schedule 13 to the Finance Act 2002”.

(7) In subsection (8BA), omit (in both places) “, tax credit under Schedule 13 to the Finance Act 2002”.

268 U.K. Omit section 827 (VAT penalties etc).

269 (1) Amend section 828 (orders and regulations made by the Treasury or the Board) as follows. U.K.

(2) In subsection (4) omit “79B(5),”.

(3) In subsection (5)—

(a) for “or section 717 of ITEPA 2003” substitute “ , section 717 of ITEPA 2003 or section 1310 of CTA 2009 ”,

(b) in paragraph (a) for “or ITEPA 2003” substitute “ , ITEPA 2003 or CTA 2009 ”, and

(c) in paragraph (b) for “either” substitute “ any ”.

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

271 U.K. In section 831(3) (interpretation of ICTA) before the definition of “ITEPA 2003” insert—

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

272 (1) Amend section 832 (interpretation of the Corporation Tax Acts) as follows. U.K.

(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. U.K.

(2) In subsection (1)—

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

(b) at the appropriate place insert—

““the charge to corporation tax on income” has the same meaning as in CTA 2009 (see section 2(3));”,

(c) in the definition of “chargeable profits”, for “section 11(2)” substitute “ section 19 of CTA 2009 ”,

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

(e) at the appropriate place insert—

““income” includes anything to which the charge to corporation tax on income applies;”,

(f) in the definition of “loan relationship” for “Chapter II of Part IV of the Finance Act 1996” substitute “ Part 5 of CTA 2009 ”,

(g) in the definition of “non-trading deficit” for “section 82 of the Finance Act 1996” substitute “ section 301 of CTA 2009 ”, and

(h) at the appropriate place insert—

““registered industrial and provident society” means—

(a) a society registered or treated as registered under the Industrial and Provident Societies Act 1965 or the Industrial and Provident Societies Act (Northern Ireland) 1969, or

(b) an SCE formed in accordance with Council Regulation (EC) No 1435/2003 on the Statute for a European Co-Operative Society;”.

(3) In subsection (2)—

(a) for “sections 75 and 76” substitute “ section 76 ”, and

(b) at the end insert— “ section 834C. ”

(4) In subsection (4) (apportionment to different periods) after “those Acts” insert “ , other than CTA 2009, ”.

274 U.K. After section 834 insert—

“834A Miscellaneous charges (list for the purposes of certain provisions that formerly referred to Case VI of Schedule D)

(1) In the Corporation Tax Acts references to any provision to which this section applies are references to any provision listed in the following table, so far as the provision relates to corporation tax (but subject to any applicable limitation in subsection (3)).

(2) This is the table—

PART 1

Provisions of this Act	Description
Section 56(2)	Transactions in deposits
Section 214(1)(ab)	Chargeable payments connected with exempt distributions
Section 436A(1)	Gross roll-up business: separate charge on profits
Section 442A(1)	Taxation of investment return where risk reinsured
Section 571(1)	Cancellation of tax certificates
Section 730(6)	Transfers of income arising from securities
Section 761(1)(b)(ii)	Offshore income gains
Section 774(1)	Transactions between dealing company and associated company
Section 776(3A)	Transactions in land
Section 780(3A)(b)	Sale and leaseback: taxation of consideration received
Section 781(1)	Assets leased to traders and others
Section 786(5)(b)	Transactions associated with loans or credit

PART 2

Provisions of CTA 2009	Description
Chapter 15 of Part 3	Post-cessation receipts: trades
Chapter 7 of Part 4	Rent receivable in connection with a UK section 39(4) concern
Chapter 8 of Part 4	Rent receivable for UK electric-line wayleaves
Chapter 9 of Part 4	Post-cessation receipts: UK property businesses
Section 752	Non-trading gains on intangible fixed assets
Section 908	Profits from disposals of know-how
Section 912	Profits from sales of patent rights
Section 965(4)	Adjustments after the administration period
Chapter 8 of Part 10	Income not otherwise charged
Section 986(4), so far as it relates to an amount treated as received under section 998(3)	Withdrawal of deductions if approval for share incentive plan withdrawn: non-trading cases
Section 1083(5)	Refunds of expenditure on research and development
Section 1229	Management expenses: claw back of relief
Section 1252	Industrial development grants: companies with investment business
Section 1253	Contributions to local enterprise organisations or urban regeneration companies: disqualifying benefits
Section 1254	Repayments under the Financial Services and Markets Act 2000
Section 1277(4)	Withdrawal of relief for unremittable foreign income after source ceases

PART 3

Other provisions	Description
Section 85(1) of the Finance Act 1989	Certain receipts of basic life assurance and general annuity business
Section 85A(1) of the Finance Act 1989	Excess adjusted life assurance trade profits
Paragraph 3(1) of Schedule 12 to the Finance (No 2) Act 1992	Banks etc in compulsory liquidation
Section 256(2) of the Capital Allowances Act	Life assurance business: capital allowances
Section 131(4) of the Finance Act 2004	Companies in partnership
Section 27(2) of the Finance (No 2) Act 2005	Avoidance involving tax arbitrage: qualifying payments
Section 112(1) of the Finance Act 2006	Real estate investment trusts: entry charge

(3) The reference in Part 2 of the above table to Chapter 8 of Part 10 of CTA 2009 does not include that Chapter so far as relating to income which arises from a source outside the United Kingdom.”

275 U.K. After section 834A insert—

“834B Meaning of “UK property business” and “overseas property business”

In the enactments relating to corporation tax “UK property business” and “overseas property business” have the meaning given by Chapter 2 of Part 4 of CTA 2009.”

276 U.K. After section 834B insert—

“834C Total profits

(1) In the Corporation Tax Acts references to total profits, in relation to an accounting period of a company, are to the amount arrived at by adding together—

(a) the amounts chargeable for the period under the charge to corporation tax on income, and

(b) any amount to be included for the period in respect of chargeable gains (see section 8 of the 1992 Act).

(2) Subsection (1) is subject to the provisions of the Corporation Tax Acts.”

277 (1) Amend section 842 (investment trusts) as follows. U.K.

(2) In subsection (1AB) for “Chapter 2 of Part 4 of the Finance Act 1996” substitute “ Part 5 of CTA 2009 ”.

(3) In subsection (1AC) for the words from “falls” to the end substitute “ is charged to corporation tax under section 1229(3)(b) of CTA 2009 (claw back of relief for expenses of management) ”.

(4) After subsection (2C) insert—

“(2D) For the purpose of determining whether a company may be approved for the purposes of this section for an accounting period, the excess of any relevant credits arising in that period over any relevant debits so arising is treated for the purposes of this section as income derived from shares or securities.

(2E) In subsection (2D) “relevant credits” and “relevant debits”, in relation to an accounting period, means credits and debits which are brought into account in respect of that period by virtue of section 574 of CTA 2009 (non-trading credits and debits to be brought into account under Part 5 of that Act).”

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

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

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

281 U.K. In paragraph 13(3) of Schedule 18A (group relief: overseas losses of non-resident companies) for “Schedule A purposes” substitute “ the purpose of calculating the profits of a UK property business under Part 4 of CTA 2009 ”.

282 (1) Amend Schedule 19ABA (modification of life assurance provisions of the Corporation Tax Acts in relation to BLAGAB group reinsurers) as follows. U.K.

(2) In paragraph 9 for “Case I of Schedule D” substitute “ section 35 of CTA 2009 ”.

(3) In the italic cross-heading before paragraph 9 for “Case I of Schedule D” substitute “ section 35 of CTA 2009 ”.

(4) In paragraph 23 for “Case I” substitute “ life assurance trade ”.

(5) In the italic cross-heading before paragraph 23 for “Case I” substitute “ life assurance trade ”.

283 U.K. In paragraph 6(6)(b) of Schedule 19B (petroleum extraction activities: exploration expenditure supplement), at the end insert “ or starts to be within the charge to corporation tax in respect of such a ring fence trade. ”

284 (1) Amend Schedule 19C (petroleum extraction activities: ring fence expenditure supplement) as follows. U.K.

(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. U.K.

(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. U.K.

(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. U.K.

(2) In paragraph 2(1A)—

(a) for paragraph (a) substitute—

“(a) it is chargeable neither under Chapter 2 of Part 3 of CTA 2009 as profits of a trade carried on wholly or partly in the United Kingdom nor under section 436A (gross roll-up business: separate charge on profits);”, and

(b) in paragraph (b) for the words from “Case I” to “above” substitute “ Chapter 2 of Part 3 of CTA 2009 as profits of a trade carried on wholly or partly in the United Kingdom, or under section 436A ”.

(3) In paragraph 2(1B)(a) for “section 208” substitute “ section 1285 of CTA 2009 ”.

(4) In paragraph 4(1A)—

(a) for paragraph (a) substitute—

“(a) it is chargeable neither under Chapter 2 of Part 3 of CTA 2009 as profits of a trade carried on wholly or partly in the United Kingdom nor under section 436A (gross roll-up business: separate charge on profits);”, and

(b) in paragraph (b) for the words from “Case I” to “above” substitute “ Chapter 2 of Part 3 of CTA 2009 as profits of a trade carried on wholly or partly in the United Kingdom, or under section 436A ”.

(5) In paragraph 12(6) for “Case I of Schedule D” substitute “ section 35 of CTA 2009 ”.

288 U.K. In Schedule 26 (reliefs against liability for tax in respect of chargeable profits) in paragraph 1(3)(c) for “section 75(1)” substitute “ section 1219(1) of CTA 2009 ”.

289 (1) Amend Schedule 27 (distributing funds) as follows. U.K.

(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. U.K.

(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. U.K.

(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. U.K.

(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 2 U.K. Other enactments

Finance Act 1950 (c. 15) U.K.

293 U.K. The Finance Act 1950 is amended as follows.

294 U.K. In 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) U.K.

295 U.K. The Taxes Management Act 1970 is amended as follows.

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

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

298 U.K. In 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).”

299 U.K. In 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. U.K.

(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).

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

302 U.K. In 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.”

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

(f) section 1313 of CTA 2009.”

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

305 U.K. In 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. U.K.

(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. U.K.

(2) In the first column of the Table—

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

F7 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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. ”

Textual Amendments

F7 Sch. 1 para. 307(2)(b) omitted (13.8.2009) by virtue of Finance Act 2009, Schedule 47 (Consequential Amendments) Order 2009 (S.I. 2009/2035), art. 1, Sch. para. 60(q)

308 U.K. After section 109 insert—

“109A Residence 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.”

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

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

310 U.K. In 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) U.K.

311 U.K. The Finance Act 1973 is amended as follows.

312 U.K. In 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) U.K.

313 U.K. The Oil Taxation Act 1975 is amended as follows.

314 U.K. In 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) U.K.

315 U.K. The Inheritance Tax Act 1984 is amended as follows.

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

(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.”

317 U.K. In 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) U.K.

318 U.K. The Films Act 1985 is amended as follows.

319 U.K. In 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) U.K.

320 U.K. The Airports Act 1986 is amended as follows.

321 U.K. In 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) U.K.

322 U.K. The Finance Act 1986 is amended as follows.

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

324 U.K. In 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 ”.

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

Gas Act 1986 (c. 44) U.K.

326 U.K. The Gas Act 1986 is amended as follows.

327 U.K. In 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) U.K.

328 U.K. The British Steel Act 1988 is amended as follows.

329 U.K. In 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) U.K.

330 U.K. The Finance Act 1988 is amended as follows.

331 U.K. Omit section 65 (commercial woodlands).

332 U.K. Omit section 66 (company residence).

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

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

335 U.K. Omit Schedule 6 (commercial woodlands).

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

337 U.K. In 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) U.K.

338 U.K. The Finance Act 1989 is amended as follows.

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

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

341 U.K. In 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) ”.

342 U.K. In 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 ”.

343 U.K. In 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. U.K.

(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. U.K.

(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 ”.

346 U.K. In 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. U.K.

(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. U.K.

(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. U.K.

(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 ”.

350 U.K. In 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. U.K.

(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) U.K.

352 U.K. The Finance Act 1990 is amended as follows.

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

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

Finance Act 1991 (c. 31) U.K.

355 U.K. The Finance Act 1991 is amended as follows.

356 U.K. For 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.”

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

Taxation of Chargeable Gains Act 1992 (c. 12) U.K.

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

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

360 U.K. In 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.”

361 U.K. In 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 ”.

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

363 U.K. In 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. ”

364 U.K. In 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. U.K.

(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. U.K.

(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.

367 U.K. After section 116 insert—

“116A Holding 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.

116B Shares 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).”

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

369 U.K. In 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 ”.

370 U.K. After section 151D insert—

“151E Exchange 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.

151F Treatment 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.

151G Regulations 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.”

371 U.K. In 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 ”.

372 U.K. After section 156 insert—

“156ZA Intangible 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.

156ZB Intangible 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.”

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

374 U.K. In 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 ”.

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

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

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

378 U.K. For 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. U.K.

(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. U.K.

(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),”.

381 U.K. In section 251(8) (general provisions) omit—

(a) paragraph (a), and

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

382 U.K. In 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 ”.

383 U.K. In 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.”

384 U.K. After section 286 insert—

“286A Residence 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.”

385 U.K. In 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);”.

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

387 U.K. In 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. U.K.

(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) U.K.

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

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

(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) U.K.

391 U.K. The Finance Act 1994 is amended as follows.

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

(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 ”.

F8 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F8 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F8 Sch. 1 para. 392(4)(5) omitted (with effect in accordance with Sch. 14 para. 31 of the amending Act) by virtue of Finance Act 2009 (c. 10), Sch. 14 para. 30(e)

393 U.K. In 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 ”.

394 U.K. In 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 ”.

395 U.K. In 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 ”.

396 U.K. In 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);”.

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

398 U.K. In 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) U.K.

399 U.K. The Finance Act 1995 is amended as follows.

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

401 U.K. In 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) U.K.

402 U.K. The Finance Act 1996 is amended as follows.

403 U.K. Omit section 80 (taxation of loan relationships).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

430 U.K. Omit section 95 (gilt strips).

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

432 U.K. Omit section 97 (manufactured interest).

433 U.K. Omit section 98 (collective investment schemes).

434 U.K. Omit section 99 (insurance companies).

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

436 U.K. Omit section 101 (financial instruments).

437 U.K. Omit section 103 (interpretation of Chapter).

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

439 U.K. In 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) ”.

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

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

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

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

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

(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) U.K.

445 U.K. The Broadcasting Act 1996 is amended as follows.

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

(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) U.K.

447 U.K. The Finance Act 1997 is amended as follows.

448 U.K. In 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) U.K.

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

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

Finance Act 1998 (c. 36) U.K.

451 U.K. The Finance Act 1998 is amended as follows.

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

453 U.K. In 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. U.K.

(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) U.K.

455 U.K. The Finance Act 1999 is amended as follows.

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

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

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

(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 ”.

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

Commonwealth Development Corporation Act 1999 (c. 20) U.K.

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

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

(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) U.K.

462 U.K. The Finance Act 2000 is amended as follows.

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

(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.”

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

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

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

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

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

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

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

(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) U.K.

471 U.K. The Transport Act 2000 is amended as follows.

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

(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. U.K.

(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) U.K.

474 U.K. The Capital Allowances Act 2001 is amended as follows.

475 U.K. In 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) ”.

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

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

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

(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. U.K.

(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 ”.

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

481 U.K. In 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. U.K.

(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 ”.

483 U.K. In 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. U.K.

(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. U.K.

(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. U.K.

(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. U.K.

(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. U.K.

(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. U.K.

(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.”

490 U.K. In 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. U.K.

(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. U.K.

(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 ”.

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

494 U.K. In 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. U.K.

(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. U.K.

(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.”

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

498 U.K. In 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, ”.

499 U.K. In 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”.

500 U.K. In 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. U.K.

(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. U.K.

(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 ”.

503 U.K. In 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. U.K.

(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 ”.

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

506 U.K. In 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. U.K.

(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. U.K.

(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 ”.

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

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

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

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

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

514 U.K. In 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. U.K.

(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).

516 U.K. In 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 ”.

517 U.K. In 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. U.K.

(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. U.K.

(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. U.K.

(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. U.K.

(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. U.K.

(2) In Part 1 at the end insert—

“CTA 2009

The 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 income

section 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) U.K.

523 U.K. The Finance Act 2001 is amended as follows.

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

525 U.K. Omit Schedule 22 (remediation of contaminated land).

Finance Act 2002 (c. 23) U.K.

526 U.K. The Finance Act 2002 is amended as follows.

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

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

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

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

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

(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 ”.

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

533 U.K. In 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 ”.

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

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

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

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

538 U.K. In 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. U.K.

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

(a) means 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).

540 U.K. Omit 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. U.K.

(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.

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

543 U.K. Omit Schedule 26 (derivative contracts).

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

(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.”

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

Proceeds of Crime Act 2002 (c. 29) U.K.

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

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

(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) U.K.

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

549 U.K. In 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 ”.

550 U.K. In 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) ”.

551 U.K. In 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. U.K.

(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 ”.

553 U.K. In 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. U.K.

(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)”.

555 U.K. In 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 ”.

556 U.K. In Schedule 1 (abbreviations and defined expressions)—

(a) in Part 1 at the end insert—

“CTA 2009

The Corporation Tax Act 2009”, and

(b) in Part 2 omit the entries for “Schedule A business” and “UK property business”.

557 U.K. In 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) U.K.

558 U.K. The Finance Act 2003 is amended as follows.

559 U.K. Omit section 141 (corporation tax for employee share acquisitions).

560 U.K. Omit section 143 (restriction of deductions for employee benefit contributions).

561 U.K. In 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. U.K.

(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.”

563 U.K. In 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 ”.

564 U.K. After 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.”

565 U.K. In 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 ”.

566 U.K. Omit Schedule 23 (corporation tax relief for employee share acquisitions).

567 U.K. Omit Schedule 24 (restriction of deductions for employee benefit contributions).

568 U.K. In 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) U.K.

569 U.K. The Finance Act 2004 is amended as follows.

570 U.K. In section 71 (collection and recovery of sums to be deducted) omit subsection (3)(b) and the “and” immediately before it.

F9 571 U.K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F9 Sch. 1 para. 571 omitted (retrospective and with effect in accordance with Sch. 24 paras. 12, 13-16 of the commencing Act) by virtue of Finance Act 2009 (c. 10), Sch. 24 paras. 9(f), 12

572 (1) Amend section 131 (companies in partnership) as follows. U.K.

(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. U.K.

(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 ”.

574 U.K. In 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 ”.

575 U.K. In 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. ”

576 U.K. In 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 ”.

577 U.K. In 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. U.K.

(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, ”.

579 U.K. In 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 ”.

580 U.K. In 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. U.K.

(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) U.K.

582 U.K. The Energy Act 2004 is amended as follows.

583 (1) Amend section 27 (tax exemption for NDA activities) as follows. U.K.

(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. U.K.

(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 ”.

585 U.K. In 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. U.K.

(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) U.K.

587 U.K. The Income Tax (Trading and Other Income) Act 2005 is amended as follows.

588 U.K. In 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. U.K.

(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).”

590 U.K. In section 49(2)(b) (car or motor cycle hire: supplementary) after “the car” insert “ or motor cycle ”.

591 U.K. In 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. U.K.

(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 ”.

593 U.K. In 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 ”.

594 U.K. In 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. U.K.

(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. U.K.

(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 ”.

597 U.K. Omit section 79(2) (additional payments: change in persons carrying on the trade).

598 U.K. After section 79 insert—

“79A Additional 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.”

599 U.K. In section 80(2) (payments made by the Government) for “79” substitute “ 79A ”.

600 U.K. In 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. U.K.

(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) ”.

602 U.K. In section 158(1)(d) (lease premiums etc: reduction of receipts) for “term” substitute “ terms ”.

603 U.K. In 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 ”.

604 U.K. In section 171(2)(d) (allocation of ancillary capital expenditure) for “section 91(1)(b) of ICTA,” substitute “ section 147(2)(b) of CTA 2009 ”.

605 U.K. In 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 ”.

606 U.K. In section 176(1)(a) (sale basis of valuation: sale to unconnected person) after “trade”, in both places where it occurs, insert “ , profession or vocation ”.

607 U.K. In section 177(1)(a) (sale basis of valuation: sale to connected person) after “trade”, in both places where it occurs, insert “ , profession or vocation ”.

608 U.K. In 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. U.K.

(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 ”.

610 U.K. In 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, ”.

611 U.K. In 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 ”.

612 U.K. In 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. ”

613 U.K. In 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. ”

614 U.K. In section 276(3) (introduction to Chapter 4 of Part 3) for “term” substitute “ terms ”.

615 U.K. In section 279(3) for “or of” substitute “ of or ”.

616 U.K. In 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. U.K.

(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. U.K.

(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. U.K.

(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. U.K.

(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 ”.

621 U.K. For 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”.”

622 U.K. For 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.”

623 U.K. In section 296(1)(a) (corporation tax receipts treated as taxed receipts) after “2005” insert “ but before 1st April 2009 ”.

624 U.K. In 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) ”.

625 U.K. In 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. U.K.

(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. U.K.

(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 ”.

628 U.K. In 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. U.K.

(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 ”.

630 U.K. In 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)”.

631 U.K. In 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)”.

632 U.K. In 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.

633 U.K. In 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 ”.

634 U.K. In 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) ”.

635 U.K. After section 749 insert—

“749A Interest on tax overpaid

No liability to income tax arises in respect of interest paid under section 826 of ICTA (interest on tax overpaid).”

636 U.K. In 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. U.K.

(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).”

638 U.K. In 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) ”.

639 U.K. In 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.”

640 U.K. For section 850 (allocation of firm's profits or losses between partners) substitute—

“850 Allocation 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.

850A Profit-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.

850B Loss-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. U.K.

(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) ”.

642 U.K. For section 861 (sale of patent rights: effect of partnership changes) substitute—

“861 Sale 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. U.K.

(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).

644 U.K. Omit section 881 (disapplication of corporation tax: section 9 of ICTA).

645 (1) Amend Schedule 1 (consequential amendments) as follows. U.K.

(2) Omit paragraph 312(4)(b) and the “and” immediately before it.

646 (1) Amend Schedule 2 (transitionals and savings etc) as follows. U.K.

(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. U.K.

(2) In Part 1 at the end insert—

“CTA 2009

The 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) U.K.

648 U.K. The Finance Act 2005 is amended as follows.

649 U.K. In 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 ”.

650 U.K. In 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) ”.

651 U.K. In section 48B (alternative finance arrangements: alternative finance investment bond: effects)—

F10 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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.

Textual Amendments

F10 Sch. 1 para. 651(a) omitted (21.7.2009) by virtue of Finance Act 2009 (c. 10), Sch. 61 para. 28

652 U.K. In section 49(2) (alternative finance arrangements: deposit) for “profit share return” substitute “ alternative finance return ”.

653 U.K. In 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 ”.

654 U.K. Omit section 50 (treatment of alternative finance arrangements: companies).

655 U.K. In section 51 (treatment of alternative finance arrangements: persons other than companies) in subsections (1), (4) and (5)(b) omit “or profit share return”.

656 U.K. In section 52 (provision not at arm's length)—

(a) in subsection (2) omit “or profit share return”, and

(b) omit subsection (6).

657 U.K. Omit section 54 (return not to be treated as distribution).

658 U.K. In 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 ”.

659 U.K. In section 55 (further provisions) omit “, corporation tax”.

660 U.K. In 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 ”.

661 U.K. In 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”.

662 U.K. In 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) ”.

663 U.K. In 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. U.K.

(2) Omit paragraph 2.

(3) Omit paragraph 7.

(4) In paragraphs 8, 10, 11(c), 12 and 13 omit “or profit share return”.

665 U.K. In Schedule 4 (accounting practice and related matters) omit paragraphs 27 and 52.

Railways Act 2005 (c. 14) U.K.

666 U.K. The Railways Act 2005 is amended as follows.

667 (1) Amend Schedule 10 (taxation provisions relating to transfer schemes) as follows. U.K.

(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) U.K.

668 U.K. The Finance (No. 2) Act 2005 is amended as follows.

669 U.K. In 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. U.K.

(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) ”.

671 U.K. In 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 ”.

672 U.K. In section 71 (interpretation) after the definition of “CAA 2001” insert—

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

673 U.K. In 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).

674 U.K. In 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) U.K.

675 U.K. The Finance Act 2006 is amended as follows.

676 U.K. Omit sections 31 to 41 (provisions about films, in particular film tax relief).

677 U.K. In 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”.

678 U.K. Omit sections 43 to 45 (film losses).

679 U.K. At 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.”

680 U.K. Omit sections 48 to 50 (sound recordings).

681 U.K. Omit section 52 (films: application of provisions to certain films already in production).

682 U.K. Omit section 53(2) (films and sound recordings: commencement etc).

683 U.K. In 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 ”.

684 U.K. In 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 ”.

685 U.K. In 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).”

686 U.K. In 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 ”.

687 U.K. In 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. U.K.

(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. U.K.

(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 ”.

690 U.K. In 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).”

691 U.K. In 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 ”.

692 U.K. In section 179 (interpretation) after the definition of “CAA 2001” insert—

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

693 U.K. Omit Schedule 4 (taxation of activities of film production company).

694 U.K. In 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. U.K.

(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. U.K.

(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. U.K.

(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. U.K.

(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) U.K.

699 U.K. The Income Tax Act 2007 is amended as follows.

700 U.K. For section 5 substitute—

“5 Income 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).”

701 U.K. In 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) ”.

702 U.K. In section 489(6) (the “applicable period” in relation to shares) for “paragraph 9 of Schedule 4AA to ICTA” substitute “ section 989 of CTA 2009 ”.

703 U.K. In section 550(a) (meaning of “relievable gift”) for “section 83A of ICTA” substitute “ section 105 of CTA 2009 ”.

704 U.K. In 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. U.K.

(2) Omit subsection (2).

(3) In the title omit “and companies”.

706 U.K. After section 835 insert—

“835A Residence 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.”

707 U.K. In 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).”

708 U.K. In 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. U.K.

(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 ”.

710 U.K. In section 934(4) (non-UK resident companies) for “section 11(2) of ICTA” substitute “ section 19 of CTA 2009 ”.

711 U.K. In 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 ”.

712 U.K. In 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. U.K.

(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)”.

714 U.K. In 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) ”.

715 U.K. In 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. U.K.

(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) ”.

717 U.K. In 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.”

718 U.K. In section 980(2) (derivative contracts: exception from duties to deduct) for “Schedule 26 to FA 2002” substitute “ Part 7 of CTA 2009 ”.

719 U.K. In section 989 (definitions) omit the definition of “Schedule A business”.

720 U.K. In section 1017 (abbreviated references to Acts) after the definition of “CAA 2001” insert—

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

721 U.K. In Schedule 4 (index of defined expressions) omit the entry for “Schedule A business”.

Finance Act 2007 (c. 11) U.K.

722 U.K. The Finance Act 2007 is amended as follows.

723 U.K. In section 113 (interpretation) after the definition of “CRCA 2005” insert—

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

724 U.K. In Schedule 3 (managed service companies) omit paragraph 10.

725 (1) Amend Schedule 7 (insurance business: gross roll-up business etc) as follows. U.K.

(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. U.K.

(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.

727 U.K. In 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) U.K.

728 U.K. The Finance Act 2008 is amended as follows.

729 U.K. Omit section 29 (cap on R&D aid).

730 U.K. Omit section 36(1) (company gains from investment life insurance contracts etc).

731 U.K. In 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 ”.

732 U.K. In section 154(6) (stamp duty and stamp duty reserve tax: alternative investment bonds) after “2005” insert “ or section 507 of CTA 2009 ”.

733 U.K. In section 165(1) (interpretation) after the definition of “CRCA 2005” insert—

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

734 U.K. In Schedule 10 (cap on R&D aid), omit paragraphs 1 to 7.

735 U.K. Omit Schedule 13 (company gains from investment life insurance contracts).

736 U.K. In Schedule 15 (changes in trading stock), omit Part 2.

737 U.K. In 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) U.K.

738 U.K. The Crossrail Act 2008 is amended as follows.

739 (1) Amend Schedule 13 (transfer schemes: tax provisions) as follows. U.K.

(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.