3(1)Section 54 of the Taxes Act 1988 and section 111 of the Taxes Act 1970 (which confer on a person occupying commercial woodlands the right to elect to be assessed and charged to tax in respect of them under Schedule D instead of under Schedule B) shall cease to have effect.
(2)Subject to paragraph 5(1) below, profits or gains or losses which arise to a person from the occupation of commercial woodlands on or after 15th March 1988 shall not be regarded for any purposes as profits or gains or losses chargeable under Schedule D.
(3)Subject to paragraph 5(1) below—
(a)interest which is paid by a company on or after 15th March 1988 shall not be treated as a charge on income for the purposes of corporation tax; and
(b)interest which is paid by any person on or after that date and—
(i)is stated in section 360(1), 361(3) or 362 of the Taxes Act 1988 (loans to buy interest in close company, interest in employee-controlled company or into partnership) to be eligible for relief under section 353 of that Act; or
(ii)is stated in any of the corresponding enactments repealed by that Act to be eligible for relief under section 75 of the M1Finance Act 1972,
shall not be so eligible,
if the relevant business consists of the occupation of commercial woodlands.
(4)Where part only of the relevant business consists of the occupation of commercial woodlands—
(a)interest falling within paragraph (a) of sub-paragraph (3) above shall not be treated as a charge on income for the purposes of corporation tax; and
(b)interest falling within paragraph (b) of that sub-paragraph shall not be eligible for relief under section 353 of the Taxes Act 1988 or section 75 of the M2Finance Act 1972,
to such extent as may be just and reasonable having regard to all the circumstances of the case and, in particular, to the proportion which that part of that business bears to the whole.
(5)In this paragraph “the relevant business” means—
(a)in relation to interest paid on or after 15th March 1988 by a company which is not a member of a group, the business carried on by the company;
(b)in relation to interest paid on or after that date by a company which is a member of a group, the business carried on by the group; and
(c)in relation to interest falling within paragraph (b) of sub-paragraph (3) above, the business carried on by the close company, employee-controlled company or partnership concerned;
and for the purposes of this paragraph two or more businesses carried on by a company, group or partnership shall be regarded as a single business.
(6)For the purposes of this paragraph a company shall be deemed to be a member of a group with one or more other companies if the relationship between that company and the other company or, as the case may be, each of the other companies is as mentioned in section 341(2) of the Taxes Act 1988 or section 60(2) of the M3Finance (No. 2) Act 1987 (payments of interest between related companies).
(7)This paragraph shall be deemed to have come into force on 15th March 1988.