PART IV PROVISIONS RELATING TO THE SCHEDULE D CHARGE
C1CHAPTER V COMPUTATIONAL PROVISIONS
Treatment of regional development and other grants and debts released etc.
92 Regional development grants.
1
M1A regional development grant which, apart from this subsection, would be taken into account as a receipt in computing the profits of a trade, profession or vocation which are chargeable under Case I or II of Schedule D, shall not be taken into account as a receipt in computing those profits.
2
M2A regional development grant which is made to an investment company—
a
shall not be taken into account as a receipt in computing its profits under Case VI of Schedule D; and
b
shall not be deducted, by virtue of section 75(2), from the amount treated as expenses of management.
3
In this section “regional development grant” means a payment by way of grant under Part II of the M3Industrial Development Act 1982.
93 Other grants under Industrial Development Act 1982 etc.
1
M4A payment to which this section applies which is made to a person carrying on a trade the profits of which are chargeable under Case I of Schedule D shall be taken into account as a receipt in computing those profits; and any such payment which is made to an investment company shall be taken into account as a receipt in computing its profits under Case VI of Schedule D.
2
M5This section applies to any payment which would not, apart from this section, be taken into account as mentioned in subsection (1) above, being a payment by way of a grant under—
a
section 7 or 8 of the Industrial Development Act 1982 or section 7 or 8 of the M6Industry Act 1972; or
b
other than a grant designated as made towards the cost of specified capital expenditure or as made by way of compensation for the loss of capital assets and other than a grant falling within subsection (3) below.
3
M11A payment by way of grant which is made—
a
under Article 7 of the Order referred to in subsection (2)(c) above, and
b
in respect of a liability for corporation tax (including a liability which has already been met),
shall not be taken into account as mentioned in subsection (1) above, whether by virtue of this section or otherwise.
94 Debts deducted and subsequently released.
F31
M12Where, in computing for tax purposes the profits or gains of a trade, profession or vocation, a deduction has been allowed for any debt incurred for the purposes of the trade, profession or vocation, then, if the whole or any part of the debt is thereafter released F4otherwise than as part of a relevant arrangement or compromise, the amount released shall be treated as a receipt of the trade, profession or vocation arising in the period in which the release is effected.
F52
In subsection (1) above “relevant arrangement or compromise” has the same meaning as in section 74.
95F1Taxation of dealers in respect of distributions etc.
F6F71
Where a dealer—
a
receives a relevant distribution, that is to say—
i
any distribution which is made by a company resident in the United Kingdom (“a UK distribution”), or
ii
any payment which is representative of a UK distribution, or
b
makes any payment which is representative of a UK distribution,
the distribution or, as the case may be, the payment shall be taken into account in computing the profits of the dealer which are chargeable to tax in accordance with the provisions of this Act applicable to Case I or II of Schedule D.
1A
Accordingly, where a dealer receives a F8relevant distribution—
a
tax shall not be charged under Schedule F in respect of that distribution;
b
F9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
c
F10section 208 shall not apply to that distribution; and
d
F11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F12e
section 11(2)(a) shall have effect in relation to that distribution with the omission of the words “(but so that this paragraph shall not include distributions received from companies resident in the United Kingdom)”.
1B
F13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
For the purposes of this section a person is a dealer in relation to any F14. . . distribution if—
a
were there a sale by that person of the shares F15or stock in respect of which the distribution is made, and
b
the circumstances of that sale were such that the price would not fall to be treated as a F14. . . distribution,
the price would be taken into account in computing the profits of that person which are chargeable to tax in accordance with the provisions of this Act applicable to Case I or II of Schedule D.
F162A
The reference in subsection (2) above to the profits of a person does not include the profits of that person in respect of insurance business or any category of insurance business.
4
F17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
F17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F295ZATaxation of UK distributions received by insurance companies
1
If the total amount of relevant distributions received by a company in an accounting period exceeds £50,000, those distributions are to be taken into account in calculating for corporation tax purposes the profits of the company in that period (and accordingly section 208 does not apply in relation to those distributions).
2
A company (“company A”) receives a “relevant distribution” if—
a
it receives a distribution made by a company resident in the United Kingdom (“company B”),
b
the value of the shares or stock in respect of which the distribution is made (“the holding”) is materially reduced by reason of the distribution,
c
a profit on the sale of the holding (to anyone other than company B) would be taken into account in calculating company A's profits in respect of relevant insurance business, and
d
either—
i
the holding amounts to, or is an ingredient in a holding amounting to, 10% of all holdings of the same class in company B, or
ii
the period between the acquisition by company A of the holding and that company first taking steps to dispose of the holding does not exceed 30 days.
3
In this section “relevant insurance business” means any kind of insurance business other than life assurance business.
4
Section 177(7) of TCGA 1992 (provision supplementing provision corresponding to subsection (2)(d)(i) above) applies for the purposes of subsection (2)(d)(i).
5
Section 731(4) below (interpretation of “taking steps to dispose of securities”) applies for the purposes of subsection (2)(d)(ii) as if the reference to the securities were to the holding.
See—1979(C) s.122—election to take capital gain or loss into account when asset appropriated to stock in trade.1989 ss.67-74—employee share ownership trusts.Banking Act 1987 (c.22) s.66—contributions to the Deposit Protection Fund.