Corporation Tax Act 2009

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”.