Finance Act 2014

PART 2 Amendments consequential on Part 1 of this Schedule

Finance Act 1998

6 In Schedule 18 to FA 1998 (company tax returns, assessments and related matters), in paragraph 8 (calculation of tax payable), in subsection (1), for “section 19, 20 or 21 of the Corporation Tax Act 2010 (marginal relief for companies with small profits)” substitute “Chapter 3A of Part 8 of the Corporation Tax Act 2010 (marginal relief for companies with small ring fence profits etc)”.

Finance Act 2000

7 In Schedule 22 to FA 2000 (tonnage tax), in paragraph 57 (exclusion of relief or set-off against tax liability), in sub-paragraph (6), for paragraph (a) substitute—

“(a) any reduction under Chapter 3A of Part 8 of CTA 2010 (marginal relief for companies with small ring fence profits), or”.

Capital Allowances Act 2001

8 In section 99 of CAA 2001 (long-life assets: the monetary limit)—

(a) in subsection (4)—

(i) for “If, in a chargeable period, a company has one or more associated companies” substitute “In the case of a company (“C”), if, in a chargeable period, one or more companies are related 51% group companies of C”, and

(ii) for “number of associated” substitute “number of related 51% group”, and

(b) omit subsection (5).

9 In Part 2 of Schedule 1 to that Act (defined expressions), at the appropriate place insert—

“related 51% group company

section 279F of CTA 2010 (as applied by 1119 of that Act).”

Corporation Tax Act 2009

10 In section 104N of CTA 2009 (payment of R&D expenditure credit) in subsection (3), in the definition of “Amount A”, in paragraph (b), after “main rate” insert “(or, in the case of ring fence profits, the main ring fence profits rate)”.

11 In section 1114 of that Act (calculation of total R&D aid for the purposes of the cap), after “aid is calculated” insert “(or, in the case of a ring fence trade (within the meaning of section 277 of CTA 2010) the main ring fence profits rate at that time)”.

12 In Schedule 4 to that Act (index of defined expressions), at the appropriate place, insert—

“main ring fence profits rate

section 279A(4) (as applied by 1119 of CTA 2010)”.

Corporation Tax Act 2010

13 (1) Chapter 3 of Part 8A of CTA 2010 (profits arising from the exploitation of patents etc: relevant IP profits) is amended as follows.

(2) In section 357CL (companies eligible to elect for small claims treatment)—

(a) in subsection (5) for “the company has no associated company” substitute “no other company is a related 51% group company of the company”,

(b) in subsection (6)—

(i) for “the company has one or more associated companies” substitute “one or more other companies are related 51% group companies of the company,” and

(ii) for “those associated” substitute “those related 51% group”, and

(c) omit subsection (9).

(3) In section 357CM (small claims amount)—

(a) in subsection (5) for “the company has no associated company” substitute “no other company is a related 51% group company of the company”,

(b) in subsection (6)—

(i) for “the company has one or more associated companies” substitute “one or more other companies are related 51% group companies of the company,” and

(ii) for “those associated” substitute “those related 51% group”, and

(c) omit subsection (8).

14 (1) Part 12 of CTA 2010 (real estate investment trusts) is amended as follows.

(2) In section 534 (tax treatment of profits), omit subsection (3).

(3) In section 535 (tax treatment of gains), omit subsection (6).

(4) In section 543 (profit: financing-cost ratio), omit subsection (5).

(5) In section 551 (tax consequences of distribution to holder of excessive rights), omit subsection (6).

(6) In section 552 (“the section 552 amount”), in subsection (2), for “rate of corporation tax mentioned in section 534(3) (rate determined without reference to sections 18 to 23)” substitute “main rate of corporation tax”.

(7) In section 564 (breach of condition as to distribution of profits), omit subsection (4).

15 (1) Part 13 of CTA 2010 (other special types of company etc) is amended as follows.

(2) In section 614 (open-ended investment companies: applicable corporation tax rate), omit “(and sections 18 and 19 (relief for companies with small profits) do not apply)”.

(3) In section 618 (authorised unit trusts: applicable corporation tax rate), omit “(and sections 18 and 19 (relief for companies with small profits) do not apply)”.

(4) In section 627 (companies in liquidation etc: meaning of “rate of corporation tax” in case of companies with small profits)—

(a) for subsections (1) and (2) substitute—

“(1) This section applies if corporation tax is chargeable on ring fence profits of a company for a financial year.

(2) References in this Chapter to the “main rate of corporation tax”, so far as relating to those profits, are to be taken—

(a) if corporation tax is to be charged on those profits at the main ring fence profits rate, as references to that rate;

(b) if corporation tax is to be charged on those profits at the small ring fence profits rate, as references to that rate;

(c) if corporation tax on those profits is to be reduced by reference to the marginal relief fraction within the meaning of Chapter 3A of Part 8 (see sections 279B and 279C), as including references to the marginal relief fraction (and with references to a rate being “fixed” or “proposed” read accordingly as references to the marginal relief fraction concerned being fixed or proposed).”

(b) accordingly, in the heading for the section, for “small profits” substitute “ring fence profits”.

(5) In section 628 (company in liquidation: corporation tax rates), for “the rate of corporation tax” (in each place it occurs) substitute “the main rate of corporation tax”.

(6) In section 630 (company in administration: corporation tax rates), for “the rate of corporation tax” (in each place it occurs) substitute “the main rate of corporation tax”.

16 In section 1119 of CTA 2010 (Corporation Tax Acts definitions), at the appropriate places insert—

• ““main ring fence profits rate” has the meaning given by section 279A(4),”, and

• ““related 51% group company” is to be read in accordance with section 279F,”.

17 (1) Schedule 4 to CTA 2010 (index of defined expressions) is amended as follows.

(2) Insert the following entries at the appropriate places—

“the main ring fence profits rate

section 279A(4) (as applied by section 1119)”

“the marginal relief fraction (in Chapter 3A of Part 8)

section 279B(3)”

“related 51% group company

section 279F (as applied by section 1119)”

“the small ring fence profits rate

section 279A(4)”

(3) Omit the entries for—

• “associated company (in Part 3)”;

• “close investment holding company (in Part 3)”;

• “the ring fence fraction (in Part 3)”;

• “the small profits rate”;

• “the standard fraction (in Part 3)”.

(4) In the entry for “augmented profits (in Part 3)”—

(a) in the first column for “Part 3” substitute “Chapter 3A of Part 8”, and

(b) in the second column, for “32” substitute “279G”.

(5) In the entry for “the lower limit (in Part 3)”—

(a) in the first column for “Part 3” substitute “Chapter 3A of Part 8”, and

(b) in the second column for “24” substitute “279E”.

(6) In the entry for “the upper limit (in Part 3)”—

(a) in the first column for “Part 3” substitute “Chapter 3A of Part 8”, and

(b) in the second column for “24” substitute “279E”.

Finance Act 2012

18 In section 102 of FA 2012 (policy holders’ rate of tax on policyholders’ share of I-E profit), omit subsection (5).

Finance Act 2013

19 In section 6 of FA 2013 (main rate for financial year 2015)—

(a) in subsection (1) for “the rate” substitute “the main rate”,

(b) in that subsection, omit “on profits of companies other than ring fence profits”, and

(c) omit subsection (2).

20 In Schedule 25 to that Act (charge on certain high value disposals by companies etc), omit paragraph 19.