Corporation Tax Act 2010

Part 1 Income and Corporation Taxes Act 1988

1 The Income and Corporation Taxes Act 1988 is amended as follows.

2 Omit section 6(4) (the charge to corporation tax and exclusion of income tax and capital gains tax).

3 Omit section 7 (treatment of certain payments and repayment of income tax).

4 Omit section 11(3) and (4) (companies not resident in the United Kingdom).

5 Omit sections 13 to 13A (small companies’ relief).

6 Omit section 14 (qualifying distributions).

7 (1) Omit section 24 (which has come to apply only for the interpretation of section 780 of ICTA).

(2) Sub-paragraph (1) has effect for corporation tax purposes only.

8 Omit section 56(3)(c) (exemption for transactions in deposits).

9 (1) Amend section 76 (expenses of insurance companies) as follows.

(2) In subsection (7) at Step 5 for “set off under section 393A or 403(1)” substitute “relieved under section 37 of CTA 2010 or under Chapter 4 of Part 5 of that Act”.

(3) In subsection (9)—

(a) in Rule B for “section 834(4) (apportionment on time basis)” substitute “section 1172 of CTA 2010 (apportionment to different periods)”, and

(b) in Rule C for “section 834(4) (apportionment on time basis)” substitute “section 1172 of CTA 2010 (apportionment to different periods)”.

(4) In subsection (15) after the definition of “expenses payable” insert—

• ““profits” means income and chargeable gains.”

10 In section 76ZK(8) (contributions to local enterprise organisations etc) for “Section 839 (“connected person”)” substitute “Section 1122 of CTA 2010 (connected persons)”.

11 Omit section 116 (arrangements for transferring relief).

12 Omit sections 118 to 118ZD (restrictions on relief for losses made by certain partners).

13 In section 187(10) (interpretation of sections 185 and 186 etc) for “section 834(1)” substitute “section 1119 of CTA 2010”.

14 Omit Chapter 2 of Part 6 (matters which are distributions).

15 Omit Chapter 3 of Part 6 (matters which are not distributions).

16 Omit section 231 (tax credits for certain recipients of qualifying distributions).

17 Omit section 231AA (no tax credit for borrower under stock lending arrangement or interim holder under repurchase agreement).

18 Omit section 231AB (no tax credit for original owner under repurchase agreement in respect of certain manufactured dividends).

19 In section 231B(12) (consequences of certain arrangements to pass on the value of a tax credit), in the definition of “tax advantage”, for “section 840ZA” substitute “section 1139 of CTA 2010”.

20 Omit section 234 (information relating to distributions).

21 Omit section 234A (information relating to distributions: further provisions).

22 Omit Chapter 6 of Part 6 (miscellaneous and supplemental).

23 In section 337A (computation of company’s profits or income: exclusion of general deductions) omit subsection (1).

24 Omit section 338 (charges on income deducted from total profits).

25 Omit section 338A (meaning of “charges on income”).

26 Omit section 339 (charges on income: donations to charity).

27 Omit section 342 (tax on company in liquidation).

28 Omit section 342A (tax on companies in administration).

29 Omit section 343 (company reconstructions without a change of ownership).

30 Omit section 343ZA (transfers of trade to obtain balancing allowances).

31 Omit section 343A (company reconstructions involving business of leasing plant or machinery).

32 Omit section 344 (company reconstructions: supplemental).

33 In section 369(6) (mortgage interest payable under deduction of tax) for the words from the beginning to “applies” substitute “Sections 967(2) and 968(2) of CTA 2010 do not apply to a payment of relevant loan interest to which this section applies, but any person by whom such a payment”.

34 Omit Chapter 2 of Part 10 (loss relief).

35 Omit section 397 (restriction of loss relief in case of farming and market gardening).

36 In section 398 (transactions in deposits) for “section 396” substitute “section 91 of CTA 2010”.

37 Omit section 399 (dealings in commodity futures).

38 Omit section 400 (write-off of government investment).

39 Omit Chapter 4 of Part 10 (group relief).

40 Omit Chapter 1 of Part 11 (close companies: interpretation).

41 Omit Chapter 2 of Part 11 (close companies: charges to tax in connection with loans).

42 In section 431G(4) (company carrying on life assurance business) for “set-off under section 393A or section 403(1)” substitute “relieved under section 37 of CTA 2010 or under Chapter 4 of Part 5 of that Act”.

43 (1) Amend section 432A (apportionment of income and gains) as follows.

(2) In subsection (1ZA)—

(a) in paragraph (b) for “section 121(1)(a) of the Finance Act 2006” substitute “section 548(5) of CTA 2010”, and

(b) in paragraph (j) for “section 834A” substitute “section 1173 of CTA 2010”.

(3) In subsection (1ZB)(f) for “section 834A” substitute “section 1173 of CTA 2010”.

44 In section 432AB(5) (losses from UK property business or overseas property business) for “sections 392A and 503, or section 392B, (loss relief)” substitute “Chapter 4 of Part 4 of CTA 2010 (loss relief: property losses)”.

45 In section 434(3A) (franked investment income etc)—

(a) for “subsection (7) of section 13” substitute “section 32(1) of CTA 2010 (which relates to relief for small companies)”, and

(b) for “that section” substitute “Part 3 of that Act”.

46 (1) Amend section 434A (computation of losses and limitation on relief) as follows.

(2) In subsection (2)(b) for sub-paragraphs (i) and (ii) substitute—

“(i) under section 37 of CTA 2010, or

(ii) under Chapter 4 of Part 5 of CTA 2010,”.

(3) In subsection (3)—

(a) for paragraph (a) substitute—

“(a) under Chapter 2, 4 or 6 of Part 4 of CTA 2010 (loss relief) or under Part 5 (group relief) of that Act,”, and

(b) in paragraph (aa) for “amount which is a charge on income for the purposes of corporation tax” substitute “qualifying charitable donation”.

(4) In subsection (4) for “section 403” (in both places) substitute “section 105 of CTA 2010”.

47 In section 434AZA(1) (reduced loss relief for additions to non-profit funds) for “section 393A or Chapter 4 of Part 10” substitute “section 37 of CTA 2010, or under Part 5 of that Act,”.

48 (1) Amend section 436A (gross roll-up business: separate charge on profits) as follows.

(2) In subsection (5) for “Section 396” substitute “Section 91 of CTA 2010”.

(3) In subsection (6) for “section 396” substitute “section 91 of CTA 2010”

49 (1) Amend section 440C (modifications for change of tax basis) as follows.

(2) In subsection (2) for “set off under section 393” substitute “relieved under section 45 of CTA 2010”.

(3) In subsection (4)(c) for “section 393” substitute “section 45 of CTA 2010”.

50 (1) Amend section 444A (transfers of business) as follows.

(2) In subsection (3) for the words from “in paragraphs (a) and (b)” to the end substitute “mentioned in subsection (3YA) are satisfied in relation to the business transferred”.

(3) After subsection (3) insert—

“(3YA) The conditions are—

(a) the ownership condition set out in section 941 of CTA 2010, and

(b) the tax condition set out in section 943 of that Act.”

51 In section 444AED(13) (clearance: no avoidance or group advantage) for “Chapter 4 of Part 10” substitute “Part 5 of CTA 2010”.

52 Omit section 467 (exemption for trade unions and employers’ associations).

53 Omit section 468 (authorised unit trusts).

54 Omit section 468A (open-ended investment companies).

55 Omit section 469 (other unit trusts).

56 Omit section 469A (court common investment funds).

57 Omit section 477A (building societies: loan relationships).

58 Omit section 486 (industrial and provident societies and co-operative associations).

59 Omit section 488 (co-operative housing associations).

60 Omit section 489 (self-build societies).

61 Omit section 490 (companies carrying on a mutual business or not carrying on a business).

62 Omit section 492 (treatment of oil extraction activities etc for tax purposes).

63 (1) Omit section 493 (valuation of oil disposed of or appropriated in certain circumstances).

(2) The repeal of subsections (1) to (6) of that section has effect for corporation tax purposes only.

64 Omit sections 494 to 494A (loan relationships etc, sale and lease-back and group relief).

65 (1) Omit section 495 (regional development grants).

(2) Sub-paragraph (1) has effect for corporation tax purposes only.

66 (1) Omit section 496 (tariff receipts and tax-exempt tariffing receipts).

(2) Sub-paragraph (1) has effect for corporation tax purposes only.

67 Omit section 496B (ring fence expenditure supplement).

68 Omit sections 500 to 501B (deduction of PRT, interest on repayment of PRT and supplementary charge in respect of ring fence trades).

69 (1) Omit section 502 (interpretation of Chapter 5).

(2) The repeal of subsections (1) and (2) of that section has effect for corporation tax purposes only.

70 Omit Chapter 5A of Part 12 (special rules for long funding leases of plant or machinery: corporation tax).

71 Omit section 503 (letting of furnished holiday accommodation).

72 Omit section 505 (charitable companies: general).

73 Omit section 506 (charitable and non-charitable expenditure).

74 Omit section 506A (transactions with substantial donors).

75 Omit section 506B (section 506A: exceptions).

76 Omit section 506C (sections 506A and 506B: supplemental).

77 Omit section 507 (the National Heritage Memorial Fund, the Historic Buildings and Monuments Commission etc).

78 Omit section 508 (scientific research organisations).

79 Omit section 510 (agricultural societies).

80 Omit section 510A (European Economic Interest Groupings).

81 Omit section 511(7) (the Gas Council).

82 Omit section 513 (British Airways Board and National Freight Corporation).

83 Omit section 517 (issue departments of Reserve Bank of India and State Bank of Pakistan).

84 Omit section 518 (harbour reorganisation schemes).

85 Omit section 519 (local authorities).

86 Omit section 519A (health service bodies).

87 In section 552A(11) (tax representatives) for “Section 839” substitute “Section 1122 of CTA 2010”.

88 Omit Chapter 5A of Part 13 (share loss relief).

89 Omit section 587B (gifts of shares, securities and real property to charities etc).

90 Omit section 587BA (qualifying interests in land held jointly).

91 Omit section 587C (supplementary provision for gifts of real property).

92 Omit section 687A (discretionary payments by trustees to companies).

93 Omit section 689B (order in which trustees’ expenses are to be set against income).

94 Omit Chapter 1 of Part 17 (cancellation of corporation tax advantages from certain transactions in securities).

95 Omit section 736A (manufactured dividends and interest).

96 Omit section 736B (deemed manufactured payments in the case of stock lending arrangements).

97 In section 749B(3) (interests in companies) for “Part VI” substitute “Part 23 of CTA 2010”.

98 In section 750(3)(c)(i) (territories with a lower level of taxation) for “section 7(2)” substitute “section 967 of CTA 2010”.

99 In section 751(6)(b) (accounting periods and creditable tax) for “section 7(2)” substitute “section 967 of CTA 2010”.

100 In section 755D(10) (“control” and the two “40 per cent” tests) for “subsection (7) of section 839” substitute “section 1122(4) of CTA 2010”.

101 (1) Amend section 756 (interpretation and construction of Chapter 4) as follows.

(2) In subsection (2)—

(a) in paragraph (a) for “section 839” substitute “section 1122 of CTA 2010”, and

(b) for paragraph (b) substitute—

“(b) subsections (2) to (7) of section 882 of CTA 2010 (meaning of associates) apply.”

(3) For subsection (3) substitute—

“(3) In this Chapter “loan creditor” has the meaning given by section 453 of CTA 2010.”

102 Omit sections 767A to 769 (change in ownership of company).

103 In section 774(4)(e) (transactions between dealing company and associated company) for “section 840” substitute “section 1124 of CTA 2010”.

104 (1) Omit sections 774A to 774G (factoring of income receipts etc).

(2) Sub-paragraph (1) has effect for corporation tax purposes only.

105 Omit sections 776 to 778 (transactions in land).

106 (1) Omit sections 779 to 785 (sale and lease-back etc).

(2) Sub-paragraph (1) has effect for corporation tax purposes only.

107 Omit section 785ZA (restrictions on use of losses: leasing partnerships).

108 Omit section 785ZB (section 785ZA: definitions).

109 Omit section 785B (plant and machinery leases: capital receipts to be treated as income).

110 Omit section 785C (section 785B: interpretation).

111 Omit section 785D (section 785B: lease of plant and machinery and other property).

112 Omit section 785E (section 785B: expectation that relevant capital payment will not be paid).

113 (1) Omit section 786 (transactions associated with loans or credit).

(2) Sub-paragraph (1) has effect for corporation tax purposes only.

114 In section 806A(2) (eligible unrelieved foreign tax dividends: introductory)—

(a) in paragraph (a) for “trading income for the purposes of section 393” substitute “a profit of the trade for the purposes of section 45 of CTA 2010”, and

(b) in paragraph (b) for the words from “paragraphs” to the end of that paragraph substitute “subsection (1)(a) and (b) of section 46 of CTA 2010, would by virtue of that section fall to be treated as a profit of the trade for the purposes of section 45 of that Act”.

115 Omit section 808 (restriction on deduction of interest or dividends from trading income).

116 In section 812(5) (withdrawal of right to tax credit of certain non-resident companies)—

(a) in paragraph (c) for “section 839” substitute “section 1122 of CTA 2010”, and

(b) for paragraph (d) substitute—

“(d) sections 449 to 451 of CTA 2010 apply but with the substitution in section 449 of “6 years” for “12 months”.”

117 (1) Amend section 826 (interest on tax overpaid) as follows.

(2) In subsection (4)—

(a) for “section 419(4)”, in the first place, substitute “section 458 of CTA 2010”,

(b) for “section 419(4), in the second place, substitute “that section”, and

(c) for “section 419(4A)” substitute “section 458(4) of CTA 2010”.

(3) In subsection (7A)—

(a) in paragraph (b)—

(i) for “section 393A(1)”, in the first place, substitute “section 37 of CTA 2010”,

(ii) for “set off” substitute “relieved”, and

(iii) for “section 393A(1) or 393B(3)” substitute “section 37 or 42 of that Act”, and

(b) in the words after paragraph (c) for “section 393A(1)” substitute “section 37 of CTA 2010”.

118 (1) Amend section 828 (orders and regulations made by the Treasury or the Board) as follows.

(2) In subsection (1)—

(a) omit the words “Subject to subsections (2) and (5) below,”, and

(b) omit the words from “or under” to “after this Act)”.

(3) Omit subsection (2).

(4) In subsection (3)—

(a) for “subsections (4) and (5)” substitute “subsection (4)”, and

(b) omit the words from “or under” to “after this Act)”.

(5) In subsection (4), omit “or 840A(1)(d)”.

(6) Omit subsections (5) and (6).

119 Omit section 830(1) (territorial sea of the United Kingdom).

120 In section 831(3) (interpretation of ICTA) at the appropriate place insert—

• ““CTA 2010” means the Corporation Tax Act 2010;”.

121 Omit section 832 (interpretation of the Corporation Tax Acts).

122 Omit section 834 (interpretation of the Corporation Tax Acts).

123 Omit section 834A (miscellaneous charges).

124 Omit section 834B (meaning of “UK property business” and “overseas property business”).

125 Omit section 834C (total profits).

126 Omit section 837A (meaning of “research and development”).

127 Omit section 837B (meaning of “oil and gas exploration and appraisal”).

128 Omit section 837C (meaning of “offshore installation”).

129 Omit section 838 (subsidiaries).

130 Omit section 839 (connected persons).

131 Omit section 840 (meaning of “control” in certain contexts).

132 Omit section 840ZA (meaning of “tax advantage”).

133 Omit section 840A (banks).

134 Omit section 841 (meaning of “recognised stock exchange” etc).

135 Omit section 842 (investment trusts).

136 Omit section 842A (local authorities).

137 Omit section 842B (meaning of “property investment LLP”).

138 In paragraph 5(2) of Schedule 10 (further provisions relating to profit sharing schemes)—

(a) in paragraph (a) for “section 209(2)(c)” substitute “condition C or D in section 1000(1) of CTA 2010”,

(b) in paragraph (b) for “section 210(1)” substitute “section 1022 of CTA 2010”, and

(c) in paragraph (c) for “section 249” substitute “section 1049 of CTA 2010”.

139 Omit Schedule 17 (dual resident investing companies).

140 Omit Schedule 18 (group relief: equity holders and profits or assets available for distribution).

141 Omit Schedule 18A (group relief: overseas losses of non-resident companies).

142 (1) Amend Schedule 19B (petroleum extraction activities: exploration expenditure supplement) as follows.

(2) In paragraph 15(2) (supplement in respect of a post-commencement period) for “Part 4 of Schedule 19C” substitute “sections 321 to 329 of CTA 2010”.

(3) In paragraph 18A(5) (special rule for straddling periods) for “paragraph 18 of Schedule 19C for the purposes of Part 4 of that Schedule” substitute “section 324 of CTA 2010”.

143 Omit Schedule 19C (petroleum extraction activities: ring fence expenditure supplement).

144 Omit Schedule 20 (charitable companies: qualifying investments and loans).

145 Omit Schedule 23A (manufactured dividends and interest).

146 (1) Amend Schedule 24 (assumptions for calculating chargeable profits etc) as follows.

(2) In paragraph 5(2) for “Chapter IV of Part X” substitute “Part 5 of CTA 2010”.

(3) In paragraph 8—

(a) for “section 343” substitute “Chapter 1 of Part 22 of CTA 2010”, and

(b) for each reference to “that section” substitute “that Chapter”.

147 (1) Amend Schedule 25 (cases where section 747(3) of ICTA does not apply) as follows.

(2) In paragraph 2—

(a) in sub-paragraph (7)(a) for the words “fixed-rate preference shares as defined in paragraph 1 of Schedule 18” substitute “restricted preference shares as defined in section 160(2) to (7) of CTA 2010 as modified by sub-paragraph (7A)”, and

(b) after sub-paragraph (7) insert—

“(7A) The modification referred to in sub-paragraph (7)(a) is, in section 160 of CTA 2010, the substitution for subsection (6) of—”

“(6) Condition D is that the shares do not carry any right to dividends other than dividends which—

(a) are of a fixed amount or are at a fixed percentage rate of the nominal value of the shares, and

(b) represent no more than a reasonable commercial return on the new consideration mentioned in subsection (3).””

(3) In paragraph 12(3) for the words from “section 838” to the end substitute “section 1154 of CTA 2010 has effect with the omission of the following—

(a) in subsection (2), the words “or indirectly”, and

(b) subsection (5).”

148 (1) Amend Schedule 26 (reliefs against liability for tax in respect of chargeable profits) as follows.

(2) In paragraph 1(3)(a) for “section 392A(1) or 393A(1)” substitute “section 37 or 62(1) to (3) of CTA 2010”.

(3) In paragraph 1(3)(b) for “charge on income to which section 338(1) applies” substitute “qualifying charitable donation”.

149 Omit Schedule 28A (change in ownership of company with investment business: deductions).