Corporation Tax Act 2009

Chapter 3 U.K. Land remediation tax credit

Entitlement and payment U.K.

1151 Entitlement to and payment of tax credit U.K.

(1) A company is entitled to a land remediation tax credit for an accounting period if it has a qualifying land remediation loss in the period (see section 1152).

(2) For the company to obtain a land remediation tax credit in respect of all or part of the qualifying land remediation loss it must make a claim.

(3) The amount of a land remediation tax credit to which the company is entitled is determined in accordance with section 1154.

(4) If a company claims a land remediation tax credit to which it is entitled for an accounting period, an officer of Revenue and Customs must pay to the company the amount of the credit.

This is subject to section 1155.

(5) See also section 1158, which restricts the carry forward of losses where a company claims a land remediation tax credit.

1152 Meaning of “qualifying land remediation loss” U.K.

(1) For the purposes of this Chapter a company has a “qualifying land remediation loss” in an accounting period if in the period—

(a) it obtains an additional deduction under section 1149 in calculating the profits of a UK property business or a trade, and

(b) it makes a UK property business loss in the business or a trading loss in the trade.

(2) The amount of the qualifying land remediation loss is—

(a) so much of the UK property business loss or trading loss as is unrelieved (see section 1153), or

(b) if less, 150% of the qualifying land remediation expenditure in respect of which the relief was obtained.

1153 Amount of a loss which is “unrelieved” U.K.

(1) The amount of a UK property business loss or trading loss that is “unrelieved” is the amount of the loss reduced by—

(a) any relief obtained by the company under section 392A(1) of ICTA, or that was or could have been obtained by it making a claim under section 393A(1)(a) of ICTA, to set the loss against profits of the same accounting period,

(b) any other relief obtained by the company in respect of the loss, including relief under section 393A(1)(b) of ICTA (losses set against profits of an earlier accounting period), and

(c) any loss surrendered under section 403(1) of ICTA (surrender of relief to group or consortium members).

(2) No account is to be taken for this purpose of—

(a) any UK property business losses or trading losses brought forward from an earlier accounting period under section 392A(2) or 393(1) of ICTA, or

(b) any trading losses carried back from a later accounting period under section 393A(1)(b) of ICTA.

(3) Subsections (4) to (7) apply (instead of subsection (1)) to determine the amount of a UK property business loss that is “unrelieved” in an accounting period (“the relevant accounting period”) in a case where, as a result of section 432AB(3) of ICTA, the loss is treated for the purposes of section 76 of that Act as expenses payable which fall to be brought into account at Step 3 in subsection (7) of that section.

(4) If in the relevant accounting period no amount falls to be carried forward to a subsequent accounting period under section 76(12) of ICTA (unrelieved expenses carried forward), no amount of the UK property business loss is unrelieved.

(5) If in the relevant accounting period there is an amount which falls to be carried forward to a subsequent accounting period under section 76(12) of ICTA, the amount of the UK property business loss that is unrelieved is—

(a) the amount which so falls to be carried forward, or

(b) if less, the amount of the UK property business loss.

(6) In determining for the purposes of subsection (4) or (5) whether there is an amount which falls to be carried forward to a subsequent accounting period under section 76(12) of ICTA, no account is to be taken of the amounts specified in subsection (7).

(7) Those amounts are amounts—

(a) brought forward from an earlier accounting period, and

(b) treated for the purposes of section 76 of ICTA as expenses payable which fall to be brought into account for the relevant accounting period in accordance with—

(i) Step 7 in section 76(7) of ICTA, as a result of a previous application of section 76(12) or (13) of that Act, or

(ii) Step 3 in section 76(7) of ICTA, as a result of section 391 of this Act (carry forward of surplus deficit).

(8) If—

(a) the company is an insurance company, and

(b) it is treated under section 432AA of ICTA as carrying on more than one UK property business,

references in this section to a UK property business loss are to be read in accordance with section 432AB(4) of ICTA (aggregation of losses).

Amount of tax credit U.K.

1154 Amount of tax credit U.K.

(1) The amount of the land remediation tax credit to which a company is entitled for an accounting period is 16% of the amount of the qualifying land remediation loss for the period.

(2) The Treasury may by order replace the percentage for the time being specified in subsection (1) with a different percentage.

(3) An order under subsection (2) may contain incidental, supplemental, consequential and transitional provision and savings.

Supplementary U.K.

1155 Payment of tax credit U.K.

(1) This section applies if a land remediation tax credit for an accounting period is payable to a company.

(2) The amount payable in respect of—

(a) the land remediation tax credit, or

(b) interest on the credit payable under section 826 of ICTA,

may be applied in discharging any liability of the company to pay corporation tax.

(3) So far as the amount is so applied, the duty of the officer of Revenue and Customs to pay the credit under section 1151(4) is discharged.

(4) Subsection (5) applies if the company's tax return for the accounting period is enquired into by an officer of Revenue and Customs.

(5) In that case—

(a) no payment in respect of the land remediation tax credit for the period need be made before the officer's enquiries are completed (see paragraph 32 of Schedule 18 to FA 1998), but

(b) an officer may make a payment on a provisional basis of such amount as the officer thinks fit.

(6) No payment need be made in respect of the land remediation tax credit if the company has outstanding PAYE and NIC liabilities for the period.

(7) A company has outstanding PAYE and NIC liabilities for an accounting period if it has not paid to an officer of Revenue and Customs any amount that it is required to pay—

(a) under PAYE regulations, or

(b) in respect of Class 1 national insurance contributions,

for payment periods ending in the accounting period.

(8) “Payment period” means a period—

(a) which ends on the 5th day of a month, and

(b) for which the company is liable to account for income tax and national insurance contributions to an officer of Revenue and Customs.

1156 Tax credit payment not income of company U.K.

A payment in respect of a land remediation tax credit is not income of the company for any tax purposes.

1157 Exclusion for capital gains purposes of certain expenditure U.K.

(1) This section applies if in an accounting period a payment is made to a company in respect of a land remediation tax credit.

(2) The qualifying land remediation expenditure in respect of which the payment is made is to be treated as if it were excluded by section 39 of TCGA 1992 from the sums allowable under section 38 of that Act.

1158 Restriction on losses carried forward where tax credit claimed U.K.

(1) For the purposes of section 392A of ICTA (UK property business losses carried forward) a company's UK property business loss for an accounting period in which it claims a land remediation tax credit to which it is entitled is treated as reduced by the amount of the surrendered loss for the period.

(2) For the purposes of section 393 of ICTA (relief of trading losses against future trading profits) a company's trading loss for an accounting period in which it claims a land remediation tax credit to which it is entitled is treated as reduced by the amount of the surrendered loss for the period.

(3) Subsection (4) applies (instead of subsection (1)) if in an accounting period—

(a) as a result of section 432AB(3) of ICTA, a company's UK property business loss is treated for the purposes of section 76 of that Act as expenses payable which fall to be brought into account at Step 3 in subsection (7) of that section,

(b) an amount falls to be carried forward to a subsequent accounting period under section 76(12) of ICTA (unrelieved expenses carried forward), and

(c) the company claims a land remediation tax credit for the period.

(4) The amount which falls to be carried forward to a subsequent accounting period under section 76(12) of ICTA is treated as reduced by the amount of the surrendered loss for the period.

(5) References in this section to “the amount of the surrendered loss” for an accounting period are to the amount of any qualifying land remediation loss in respect of which a land remediation tax credit is claimed for the period.