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Corporation tax: general
4.—(1) For all purposes of the Corporation Tax Acts in relation to accounting periods beginning on or after 1st April 2002—
(a)Scottish Water shall be treated as if it were the same person as each of the new water and sewerage authorities, and
(b)the new water and sewerage authorities shall be treated as if together they were the same person as Scottish Water.
(2) For the purposes of section 393 of the Taxes Act() (losses other than terminal losses) the new water and sewerage authorities shall be treated as if, before 1st April 2002, they had together carried on a single trade.
(3) Section 400 of the Taxes Act() (write-off of government investment) shall not apply with regard to any debt transferred to Scottish Water by virtue of section 22 of the Water Industry (Scotland) Act 2002.
(4) For the purposes of section 400 of the Taxes Act the new water and sewerage authorities shall be treated as if, before 1st April 2002, they had together carried on a single trade.
(5) For the purposes of corporation tax on chargeable gains—
(a)Scottish Water shall be treated as having acquired all assets transferred from the new water and sewerage authorities by virtue of section 22 of the Water Industry (Scotland) Act 2002 at the time when they were acquired by the new water and sewerage authorities, and
(b)on any disposal of any of those assets by Scottish Water, any expenditure incurred by a new water and sewerage authority which would, if the disposal had been made by that authority, have been allowable by virtue of section 38 of the Taxation of Chargeable Gains Act 1992 in computing the chargeable gain or allowable loss on the disposal of the asset shall be treated as though it had been incurred by Scottish Water.
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