Finance Act 1998

(752) (1) This section applies in any case where an apportionment under section 747(3) falls to be made as regards an accounting period of a controlled foreign company. (2) Where— (a) the persons who have relevant interests in the controlled foreign company at any time in the relevant accounting period have those interests by virtue only of directly or indirectly holding ordinary shares of the company, (b) each of those persons satisfies the condition that he is either— (i) resident in the United Kingdom throughout that accounting period, or (ii) resident in the United Kingdom at no time in that accounting period, and (c) no company which has an intermediate interest in the controlled foreign company at any time in the relevant accounting period has that interest otherwise than by virtue of directly or indirectly holding ordinary shares of the controlled foreign company, subsection (3) below shall apply. (3) Where this subsection applies, the apportionment of the controlled foreign company’s chargeable profits and creditable tax (if any) for the relevant accounting period shall be made among the persons who have relevant interests in the company at any time in that period in direct proportion to the percentage of the issued ordinary shares of the controlled foreign company which, in accordance with section 752B, each of those relevant interests represents. (4) Where subsection (3) above does not apply, the apportionment of the controlled foreign company’s chargeable profits and creditable tax (if any) for the relevant accounting period shall be made on a just and reasonable basis among the persons who have relevant interests in the company at any time in that period. (752A) (1) This section has effect for the purpose of determining for the purposes of this Chapter who has a relevant interest in a controlled foreign company at any time; and references in this Chapter to relevant interests shall be construed accordingly. (2) A UK resident company which has a direct or indirect interest in a controlled foreign company has a relevant interest in the company by virtue of that interest unless subsection (3) below otherwise provides. (3) A UK resident company which has an indirect interest in a controlled foreign company does not have a relevant interest in the company by virtue of that interest if it has the interest by virtue of having a direct or indirect interest in another UK resident company. (4) A related person who has a direct or indirect interest in a controlled foreign company has a relevant interest in the company by virtue of that interest unless subsection (5) or (6) below otherwise provides. (5) A related person who has an indirect interest in a controlled foreign company does not have a relevant interest in the company by virtue of that interest if he has the interest by virtue of having a direct or indirect interest in— (a) a UK resident company; or (b) another related person. (6) A related person who has a direct or indirect interest in a controlled foreign company does not have a relevant interest in the company by virtue of that interest to the extent that a UK resident company— (a) has the whole or any part of the same interest indirectly, by virtue of having a direct or indirect interest in the related person, and (b) by virtue of that indirect interest in the controlled foreign company, has a relevant interest in the company by virtue of subsection (2) above. (7) A person who— (a) has a direct interest in a controlled foreign company, but (b) does not by virtue of subsections (2) to (6) above have a relevant interest in the company by virtue of that interest, has a relevant interest in the company by virtue of that interest unless subsection (8) below otherwise provides. (8) A person does not by virtue of subsection (7) above have a relevant interest in a controlled foreign company by virtue of having a direct interest in the company to the extent that another person— (a) has the whole or any part of the same interest indirectly, and (b) by virtue of that indirect interest, has a relevant interest in the company by virtue of subsections (2) to (6) above. (9) No person has a relevant interest in a controlled foreign company otherwise than as provided by subsections (2) to (8) above. (10) In this section— - “related person” means a person who— 1. is not a UK resident company, but 2. is connected or associated with a UK resident company which has by virtue of subsection (2) above a relevant interest in the controlled foreign company in question; - “UK resident company” means a company resident in the United Kingdom. (752B) (1) For the purposes of section 752(3) above, where a person has a relevant interest in a controlled foreign company by virtue of indirectly holding issued ordinary shares of the company, the percentage of the issued ordinary shares of the company which the relevant interest represents is equal to— $$P×S$where—P is the product of the appropriate fractions of that person and each of the share-linked companies through which he indirectly holds the shares in question, other than the lowest share-linked company; andS is the percentage of issued ordinary shares of the controlled foreign company which is held directly by the lowest share-linked company.$ (2) In subsection (1) above and this subsection— - “the appropriate fraction", in the case of a person who directly holds ordinary shares of a share-linked company, means that fraction of the issued ordinary shares of that company which his holding represents; - “the lowest share-linked company”, in relation to a person who indirectly holds ordinary shares of a controlled foreign company, means the share-linked company which directly holds the shares in question; - “share-linked company” means a company which is share-linked to the controlled foreign company in question. (3) Where a person has different indirect holdings of shares of the controlled foreign company (as in a case where different shares are held through different companies which are share-linked to the controlled foreign company)— (a) subsection (1) above shall apply separately in relation to the different holdings with any necessary modifications; and (b) for the purposes of section 752(3) above the percentage of the issued ordinary shares of the company which the relevant interest represents is the aggregate of the percentages resulting from those separate applications. (4) Where, for the purposes of subsection (3) of section 752, the percentage of the issued ordinary shares of the controlled foreign company which a person directly or indirectly holds varies during the relevant accounting period, he shall be treated for the purposes of that subsection as holding throughout that period that percentage of the issued ordinary shares of the company which is equal to the sum of the relevant percentages for each holding period in the relevant accounting period. (5) For the purposes of subsection (4) above— - “holding period", in the case of any person, means a part of the relevant accounting period during which the percentage of the issued ordinary shares of the controlled foreign company which the person holds (whether directly or indirectly) remains the same; - “the relevant percentage", in the case of a holding period, means the percentage equal to—$P×HA$where—P is the percentage of the issued ordinary shares of the controlled foreign company which the person in question directly or indirectly holds in the holding period, as calculated in accordance with subsections (1) to (3) above so far as applicable;H is the number of days in the holding period; andA is the number of days in the relevant accounting period. (752C) (1) In this section “the relevant provisions” means sections 752 to 752B and this section. (2) For the purposes of the relevant provisions— (a) a person has a direct interest in a company if (and only if) he has an interest in the company otherwise than by virtue of having an interest in another company; (b) a person has an indirect interest in a company if (and only if) he has an interest in the company by virtue of having an interest in another company; (c) a person indirectly holds shares of a controlled foreign company if (and only if) he directly holds ordinary shares of a company which is share-linked to the controlled foreign company. (3) For the purposes of the relevant provisions, a company is “share-linked" to a controlled foreign company if it has an interest in the controlled foreign company only by virtue of directly holding ordinary shares— (a) of the controlled foreign company, or (b) of the controlled foreign company or of one or more companies which are share-linked to the controlled foreign company by virtue of paragraph (a) above, or (c) of the controlled foreign company or of one or more companies which are share-linked to the controlled foreign company by virtue of paragraph (a) or (b) above, and so on. (4) For the purposes of the relevant provisions, a company (“company A") has an intermediate interest in a controlled foreign company if (and only if)— (a) it has a direct or indirect interest in the controlled foreign company; and (b) one or more other persons have relevant interests in the controlled foreign company by virtue of having a direct or indirect interest in company A. (5) Any interest or shares held by a nominee or bare trustee shall be treated for the purposes of the relevant provisions as held by the person or persons for whom the nominee or bare trustee holds the interest or shares. (6) Where— (a) an interest in a controlled foreign company is held in a fiduciary or representative capacity, and (b) subsection (5) above does not apply, but (c) there are one or more identifiable beneficiaries, the interest shall be treated for the purposes of the relevant provisions as held by that beneficiary or, as the case may be, as apportioned on a just and reasonable basis among those beneficiaries. (7) In the relevant provisions— - “bare trustee” means a person acting as trustee— 1. for a person absolutely entitled as against the trustee; or 2. for any person who would be so entitled but for being a minor or otherwise under a disability; or 3. for two or more persons who are or would, but for all or any of them being a minor or otherwise under a disability, be jointly so entitled; - “ordinary shares", in the case of any company, means shares of a single class, however described, which is the only class of shares issued by the company; - “the relevant accounting period” means the accounting period mentioned in section 752(1); - “share” includes a reference to a fraction of a share.

Section 753

8

Section 753 of the Taxes Act 1988 (notices and appeals) shall cease to have effect.

Section 754

9

• (1) Section 754 of the Taxes Act 1988 (assessment, recovery and postponement of tax) shall be amended as follows.

• (2) In subsection (1) (provisions of section 747(4)(a) relating to assessment and recovery of a sum as if it were an amount of corporation tax to be taken as applying all enactments applying generally to corporation tax, including certain described enactments)—

• (a) for “assessment and recovery" there shall be substituted “ the charging ”; and

• (b) after “including" there shall be inserted “ those relating to company tax returns, ”.

• (3) After subsection (1) there shall be inserted—

(1A) Accordingly (but without prejudice to subsection (1) above) the Management Act shall have effect as if— (a) any reference to corporation tax included a reference to a sum chargeable under section 747(4)(a) as if it were an amount of corporation tax; and (b) any reference to profits of a company included a reference to an amount of chargeable profits of a controlled foreign company which falls to be apportioned to a company under section 747(3).

• (4) For subsection (2) (which provides for any sum assessable and recoverable under section 747(4)(a) to be regarded as corporation tax which falls to be assessed for the accounting period in which ends the accounting period of the controlled foreign company and which makes provision as to the contents of a notice of assessment) there shall be substituted—

(2) For the purposes of the Taxes Acts, any sum chargeable on a company under section 747(4)(a) is chargeable for the accounting period of the company in which ends that one of the controlled foreign company’s accounting periods the chargeable profits of which give rise to that sum.

• (5) After subsection (2) there shall be inserted—

(2A) Where— (a) an apportionment under section 747(3) falls to be made as regards an accounting period of a controlled foreign company, and (b) the apportionment falls to be made in accordance with section 752(4) on a just and reasonable basis, and (c) a company tax return is made or amended using for the apportionment a particular basis adopted by the company making the return, the Board may determine that another basis is to be used for the apportionment. (2B) For the purposes of subsection (2A) above, the Board may by notice require the company making the return— (a) to produce to them such documents in the company’s power or possession, and (b) to provide them with such information, in such form, as they may reasonably require for the purpose of determining the basis which is to be used for making the apportionment. (2C) The provisions of paragraphs 27 to 29 of Schedule 18 to the Finance Act 1998 (notice to produce documents etc for the purposes of enquiry: supplementary provisions and penalty) shall apply in relation to a notice under subsection (2B) above. (2D) Once the Board have determined under subsection (2A) above the basis to be used for the apportionment, matters shall proceed as if that were the only basis allowed by the Tax Acts. (2E) A determination under subsection (2A) above may be questioned on an appeal against an amendment, made under paragraph 30 or 34(2) of Schedule 18 to the Finance Act 1998, of the company’s company tax return, but only on the ground that the basis of apportionment determined by the Board is not just and reasonable.

• (6) For subsection (3) (appeals) there shall be substituted the following subsections—

(3) Where any appeal— (a) under paragraph 34(3) of Schedule 18 to the Finance Act 1998 against an amendment of a company tax return, or (b) under paragraph 48 of that Schedule against a discovery assessment or discovery determination under paragraph 41 of that Schedule (including an assessment by virtue of paragraph 52 of that Schedule), involves any question concerning the application of this Chapter in relation to any particular person, that appeal shall be to the Special Commissioners. (3A) Where— (a) any such question as is mentioned in subsection (3) above falls to be determined by the Special Commissioners for the purposes of any proceedings before them, and (b) the question is one whose resolution is likely to affect the liability of more than one person under this Chapter in respect of the controlled foreign company concerned, subsection (3B) below shall apply. (3B) Where this subsection applies— (a) each of the persons whose liability under this Chapter in respect of the controlled foreign company concerned is likely to be affected by the resolution of the question shall be entitled to appear and be heard by the Special Commissioners, or to make representations to them in writing; (b) the Special Commissioners shall determine that question separately from any other questions in those proceedings; and (c) their determination on that question shall have effect as if made in an appeal to which each of those persons was a party.

• (7) Subsection (4) shall cease to have effect.

• (8) In subsection (6) (power of Board to serve notice of liability to tax on another company with the same interest where tax assessed by virtue of section 752(6) remains unpaid by the assessable company)—

• (a) for “assessed" and “assessable", wherever occurring, there shall be substituted “ chargeable ”;

• (b) in paragraph (a), for “752(6)" there shall be substituted “ 747(4)(a) ”;

• (c) in paragraph (b), before “the same interest" there shall be inserted “ the whole or any part of ”; and

• (d) at the beginning of the words following paragraph (b) there shall be inserted “ the whole or, as the case may be, the corresponding part of ”.

• (9) In subsection (7) (liability for interest where notice of liability to tax is served)—

• (a) at the beginning of paragraph (a) there shall be inserted “ the whole, or (as the case may be) the corresponding part, of ”;

• (b) in paragraph (a), for “assessed" and “assessable" there shall be substituted “ chargeable ”; and

• (c) at the end of paragraph (b), there shall be added “(so far as referable to tax payable by the responsible company by virtue of the notice)".

• (10) In subsection (8) (recovery of tax and interest from the assessable company where the responsible company fails to pay within the time allowed) for “assessable" there shall be substituted “ chargeable ”.

Returns where it is not established whether acceptable distribution policy applies

10

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Determinations requiring the sanction of the Board

11

After section 754A of the Taxes Act 1988 there shall be inserted—

(754B) (1) This section has effect where a determination requiring the Board’s sanction is made for any of the following purposes, that is to say— (a) the giving of a closure notice; or (b) the making of a discovery assessment. (2) If the closure notice or, as the case may be, notice of the discovery assessment is given to any person without— (a) the determination, so far as it is taken into account in the closure notice or the discovery assessment, having been approved by the Board, or (b) notification of the Board’s approval having been served on that person at or before the time of the giving of the notice, the closure notice or, as the case may be, the discovery assessment shall be deemed to have been given or made (and in the case of an assessment notified) in the terms (if any) in which it would have been given or made had that determination not been taken into account. (3) A notification under subsection (2)(b) above— (a) must be in writing; (b) must state that the Board have given their approval on the basis that— (i) an amount of chargeable profits, and (ii) an amount of creditable tax (which may be nil), for the accounting period of the controlled foreign company in question fall to be apportioned under section 747(3) to the person in question; (c) must state the amounts mentioned in sub-paragraphs (i) and (ii) of paragraph (b) above; and (d) subject to paragraphs (a) to (c) above, may be in such form as the Board may determine. (4) For the purposes of this section, the Board’s approval of a determination requiring their sanction— (a) must be given specifically in relation to the case in question and must apply to the amount determined; but (b) subject to that, may be given by the Board (either before or after the making of the determination) in any such form or manner as they may determine. (5) In this section references to a determination requiring the Board’s sanction are references (subject to subsection (6) below) to any determination of the amount of chargeable profits or creditable tax for an accounting period of a controlled foreign company which falls to be apportioned to a particular person under section 747(3). (6) For the purposes of this section, a determination shall be taken, in relation to a closure notice or a discovery assessment, not to be a determination requiring the Board’s sanction if— (a) an agreement about the relevant amounts has been made between an officer of the Board and the person in whose case it is made; (b) that agreement is in force at the time of the giving of the closure notice or, as the case may be, notice of the assessment; and (c) the matters to which the agreement relates include the amount determined. (7) In paragraph (a) of subsection (6) above, “the relevant amounts” means— (a) the amount of chargeable profits, and (b) the amount of creditable tax (which may be nil), for the accounting period of the controlled foreign company in question which fall to be apportioned under section 747(3) to the person mentioned in that paragraph. (8) For the purposes of subsection (6) above an agreement made between an officer of the Board and any person (“the taxpayer") in relation to any matter shall be taken to be in force at any time if, and only if— (a) the agreement is one which has been made or confirmed in writing; (b) that time is after the end of the period of thirty days beginning— (i) in the case of an agreement made in writing, with the day of the making of the agreement, and (ii) in any other case, with the day of the agreement’s confirmation in writing; and (c) the taxpayer has not, before the end of that period of thirty days, served a notice on an officer of the Board stating that he is repudiating or resiling from the agreement. (9) The references in subsection (8) above to the confirmation in writing of an agreement are references to the service on the taxpayer by an officer of the Board of a notice— (a) stating that the agreement has been made; and (b) setting out the terms of the agreement. (10) The matters that may be questioned on so much of any appeal by virtue of any provision of the Management Act or Schedule 18 to the Finance Act 1998 (company tax returns, assessments and related matters) as relates to a determination the making of which has been approved by the Board for the purposes of this section shall not include the Board’s approval, except to the extent that the grounds for questioning the approval are the same as the grounds for questioning the determination itself. (11) In this section— - “closure notice” means a notice under paragraph 32 of Schedule 18 to the Finance Act 1998 (completion of enquiry and statement of conclusions); - “discovery assessment” means a discovery assessment or discovery determination under paragraph 41 of that Schedule (including an assessment by virtue of paragraph 52 of that Schedule).

Section 755

12

Section 755 of the Taxes Act 1988 (information relating to controlled foreign companies) shall cease to have effect.

Treatment of chargeable profits and creditable tax apportioned to company carrying on life assurance business

13

After section 755 of the Taxes Act 1988 there shall be inserted—

(755A) (1) This section applies in any case where— (a) an amount (“the apportioned profit") of a controlled foreign company’s chargeable profits for an accounting period falls to be apportioned under section 747(3) to a company resident in the United Kingdom (“the UK company"); (b) the UK company carries on life assurance business in that one of its accounting periods (“the relevant accounting period") in which ends the accounting period of the controlled foreign company; and (c) the property or rights which represent the UK company’s relevant interest in the controlled foreign company constitute to any extent assets of the UK company’s long term business fund. (2) Subsections (3) and (4) below apply if, in the case of the relevant accounting period, the UK company is not charged to tax under Case I of Schedule D in respect of its profits from life assurance business. (3) Where this subsection applies, the “appropriate rate” for the purposes of section 747(4)(a) and paragraph 1 of Schedule 26 in relation to the policy holders’ part of any BLAGAB apportioned profit shall be— (a) if a single rate of tax under section 88A(1) of the Finance Act 1989 (lower corporation tax rate on certain insurance company profits) is applicable in relation to the relevant accounting period, that rate; or (b) if more than one such rate of tax is applicable in relation to the relevant accounting period, the average of those rates over the whole of that period. (4) Where this subsection applies, the “appropriate rate” for the purposes of section 747(4)(a) and paragraph 1 of Schedule 26 shall be nil in relation to so much of the apportioned profit as is referable to— (a) pension business, (b) life reinsurance business, or (c) overseas life assurance business, carried on by the UK company. (5) If, in the case of the relevant accounting period, the UK company is charged to tax under Case I of Schedule D in respect of its profits from life assurance business, the “appropriate rate” for the purposes of— (a) section 747(4)(a), and (b) paragraph 1 of Schedule 26, shall be nil in relation to so much of the apportioned profit as is referable to the UK company’s relevant interest so far as represented by assets of its long term business fund. (6) If, in the case of the relevant accounting period,— (a) the UK company is not charged to tax under Case I of Schedule D in respect of its profits from life assurance business, (b) any creditable tax of the controlled foreign company falls to be apportioned to the UK company, and (c) the apportioned profit is to any extent referable to a category of business specified in paragraphs (a) to (c) of subsection (4) above, so much of the creditable tax so apportioned as is attributable to the apportioned profit so far as so referable shall be left out of account for the purposes of this Chapter, other than section 747(3) and this section, and shall be treated as extinguished. (7) If, in the case of the relevant accounting period,— (a) the UK company is charged to tax under Case I of Schedule D in respect of its profits from life assurance business, and (b) any creditable tax of the controlled foreign company falls to be apportioned to the UK company, so much of the creditable tax so apportioned as is attributable to so much of the apportioned profit as is referable to the UK company’s relevant interest so far as represented by assets of the UK company’s long term business fund shall be left out of account for the purposes of this Chapter, other than section 747(3) and this section, and shall be treated as extinguished. (8) Any set off under paragraph 1 or 2 of Schedule 26 against the UK company’s liability to tax under section 747(4)(a) in respect of the apportioned profit shall be made against only so much of that liability as is attributable to the eligible part of the apportioned profit. (9) Accordingly, in the application of paragraph 2 of Schedule 26 in relation to the apportioned profit, in the definition of “the relevant maximum” in sub-paragraph (3)— (a) the reference to the liability to tax referred to in sub-paragraph (1) of that paragraph shall be taken as a reference to only so much of that liability as is attributable to the eligible part of the apportioned profit; and (b) in paragraph (a), for the amount there described there shall be substituted a reference to the eligible part of the apportioned profit. (10) For the purposes of this section, the “eligible part" of the apportioned profit is any BLAGAB apportioned profit, other than the policy holders’ part. (11) For the purposes of this section, the “policy holders’ part” of any BLAGAB apportioned profit is— (a) in a case where subsection (4) of section 88A of the Finance Act 1989 applies, the whole; and (b) in any other case, the fraction described in subsection (5)(b) of that section. (12) In this section— - “BLAGAB apportioned profit” means so much of the apportioned profit as is referable to basic life assurance and general annuity business carried on by the UK company; - “long term business fund” has the meaning given by section 431(2). (13) For the purposes of this section, the part of the apportioned profit which is referable to— (a) pension business, (b) life reinsurance business, (c) overseas life assurance business, or (d) basic life assurance and general annuity business, carried on by the UK company is the part which would have been so referable under section 432A had the apportioned profit been a dividend paid to the UK company at the end of the accounting period mentioned in subsection (1)(a) above in respect of the property or rights which represent the UK company’s relevant interest in the controlled foreign company. (14) For the purposes of this section, any attribution of creditable tax to a particular part of the apportioned profit shall be made in the proportion which that part of the apportioned profit bears to the whole of the apportioned profit.

Amendment of return where general insurance business of foreign company accounted for on non-annual basis

14

After section 755A of the Taxes Act 1988 there shall be inserted—

(755B) (1) This section applies where— (a) a controlled foreign company carries on general insurance business in an accounting period; (b) an amount of the company’s chargeable profits, and an amount of its creditable tax (if any), for that accounting period falls to be apportioned under section 747(3) to a company resident in the United Kingdom (“the UK company"); (c) the UK company delivers a company tax return for that one of its accounting periods in which the controlled foreign company’s accounting period ends; and (d) in making or amending the return, the UK company has regard to accounts of the controlled foreign company drawn up using a method falling within subsection (2) below. (2) The methods which fall within this subsection are— (a) the method described in paragraph 52 of Schedule 9A to the Companies Act 1985 (which provides for a technical provision to be made in the accounts which is later replaced by a provision for estimated claims outstanding); and (b) any method which would have fallen within paragraph (a) above, had final replacement of the technical provision, as described in sub-paragraph (4) of paragraph 52 of that Schedule, taken place, and been required to take place, no later than the end of the year referred to in that sub-paragraph as the third year following the underwriting year. (3) Where this section applies— (a) the UK company may make any amendments of its company tax return arising from the replacement of the technical provision in the controlled foreign company’s accounts at any time within twelve months from the date on which the provision was replaced; and (b) notice of intention to enquire into the return under paragraph 24 of Schedule 18 to the Finance Act 1998 may be given at any time up to two years from that date (or at any later time in accordance with the general rule in sub-paragraph (3) of that paragraph). (4) If, in a case where this section applies, the accounts of the controlled foreign company are drawn up using a method falling within paragraph (b) of subsection (2) above— (a) the controlled foreign company, and (b) any person with an interest in the controlled foreign company, shall be treated for the purposes of this section as if final replacement of the technical provision, as described in sub-paragraph (4) of paragraph 52 of Schedule 9A to the Companies Act 1985, had taken place at, and been required to take place no later than, the end of the year referred to in that sub-paragraph as the third year following the underwriting year. (5) Regulations under section 755C may make provision with respect to the determination of the amount of the provision by which the technical provision is to be treated as replaced in cases falling within subsection (4) above. (6) In this section “general insurance business” means insurance business which is general business, as defined in section 1 of the Insurance Companies Act 1982.

Application of Chapter where general insurance business of foreign company accounted for on non-annual basis.

15

After section 755B of the Taxes Act 1988 there shall be inserted—

(755C) (1) The Treasury may by regulations provide for the provisions of this Chapter to have effect with prescribed modifications in any case where a non-resident company— (a) carries on general insurance business; and (b) draws up accounts relating to that business using a method falling within subsection (2) of section 755B. (2) Regulations under subsection (1) above may— (a) make different provision for different cases; (b) make provision having effect in relation to accounting periods of non-resident companies ending not more than one year before the date on which the regulations are made; and (c) contain such supplementary, incidental, consequential and transitional provision as the Treasury may think fit. (3) In this section— - “general insurance business” has the same meaning as in section 755B; - “non-resident company” means a company resident outside the United Kingdom; - “prescribed” means prescribed in regulations under this section.

Section 756

16

• (1) Section 756 of the Taxes Act 1988 (interpretation and construction of Chapter IV) shall be amended as follows.

• (2) In subsection (1), after “In this Chapter” there shall be inserted the following definition—

“company tax return” means a return required to be made under Schedule 18 to the Finance Act 1998;

.

Paragraph 1 of Schedule 24

17

• (1) In Schedule 24 to the Taxes Act 1988 (assumptions for calculating chargeable profits, creditable tax and corresponding United Kingdom tax of foreign companies) paragraph 1 shall be amended as follows.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) Sub-paragraph (4) (assumption for applying provisions of Schedule 24 which refer to the first accounting period for which a direction is given in cases where, as respects the accounting period in question and any earlier ones, no direction has been given) shall be amended in accordance with sub-paragraphs (7) to (9) below.

• (7) In paragraph (a) (necessity to determine chargeable profits) after “to determine" there shall be inserted “ in the case of any person ”.

• (8) For paragraph (b) (no direction given) there shall be substituted—

(b) at that time it has not been established in the case of that person that that or any earlier accounting period of the company is an accounting period in respect of which an apportionment under section 747(3) falls to be made,

.

• (9) For the words following paragraph (b) (assumption for the purpose of the provisions in question that the accounting period is the first for which a direction is given) there shall be substituted—

in determining the chargeable profits of the company for the accounting period mentioned in paragraph (a) above, it shall be assumed, for the purposes of those provisions of paragraph 9 below which refer to the first accounting period in respect of which an apportionment under section 747(3) falls to be made, that such an apportionment falls to be made in respect of that period (but not in respect of any earlier period).

Paragraph 2 of Schedule 24

18

In paragraph 2(1) of Schedule 24 to the Taxes Act 1988 (foreign company assumed to become resident in UK at beginning of first accounting period in respect of which a direction is given or which is an ADP exempt period)—

• (a) in paragraph (a), for “a direction is given under section 747(1)" there shall be substituted “ an apportionment under section 747(3) falls to be made ”; and

• (b) in the words following paragraph (b), for “a direction is given" there shall be substituted “ an apportionment falls to be made ”.

Paragraph 4 of Schedule 24

19

• (1) Paragraph 4 of Schedule 24 to the Taxes Act 1988 (assumption that claims or elections giving maximum relief have been made, subject to notice to the contrary) shall be amended as follows.

• (2) In sub-paragraph (1A)(a) (sub-paragraph (2) to apply to accounting period of foreign company in respect of which a direction is given) for “a direction is given under section 747(1)" there shall be substituted “ an apportionment under section 747(3) falls to be made ”.

• (3) In sub-paragraph (2) (notice to be given to the Board at any time not later than the expiry of the appropriate period etc)—

• (a) for “given to the Board" there shall be substituted “ given to an officer of the Board ”; and

• (b) for “the appropriate period" there shall be substituted “ the period of twenty months following the end of the accounting period ”.

• (4) In consequence of sub-paragraph (3)(b) above, sub-paragraph (2A) shall cease to have effect.

• (5) In sub-paragraph (3) (majority interest in foreign company) in paragraph (b) for “an assessment" there shall be substituted “ any liability ”.

• (6) In sub-paragraph (3A) (application of sub-paragraph (3) to ADP exempt periods)—

• (a) in paragraph (a), for “a direction had been duly given under section 747(1)" there shall be substituted “ an apportionment under section 747(3) had fallen to be made ”;

• (b) for paragraph (b) there shall be substituted—

(b) such apportionments as are mentioned in sub-paragraph (3) above had been made and such liabilities as are mentioned in that sub-paragraph had arisen.

Paragraph 9 of Schedule 24

20

• (1) Paragraph 9 of Schedule 24 to the Taxes Act 1988 (losses in pre-direction accounting periods) shall be amended as follows.

• (2) For “pre-direction", wherever occurring, there shall be substituted “ pre-apportionment ”.

• (3) In sub-paragraph (1) (which provides that, subject to sub-paragraph (2), the paragraph applies where the foreign company incurs a loss in an accounting period preceding the first in respect of which a direction is given etc)—

• (a) the words “Subject to sub-paragraph (2) below," shall cease to have effect; and

• (b) in paragraph (a), for “a direction is given under section 747(1)" there shall be substituted “ an apportionment under section 747(3) falls to be made ”.

• (4) Sub-paragraph (2) (which provides that the paragraph does not apply where a declaration is made under paragraph 11(3)) shall cease to have effect.

• (5) In sub-paragraph (3) (assumption that pre-direction period was first accounting period in respect of which a direction was given) for “a direction was given under section 747(1)" there shall be substituted “ an apportionment under section 747(3) fell to be made ”.

• (6) For sub-paragraph (4) (claim to be made by notice given to Board within 60 days of notice under section 753(1) or (3) relating to starting period etc) there shall be substituted—

(4) A claim under sub-paragraph (3) above shall be made by notice given to an officer of the Board within the period of twenty months following the end of the starting period or within such longer period as the Board may in any particular case allow.

• (7) Sub-paragraph (5) (which provides for an assumption that Chapter IV was in force before the beginning of the first of the pre-direction periods, and which is of no further practical utility) shall cease to have effect.

• (8) Sub-paragraph (6) (no account to be taken of declaration under paragraph 11(3)) shall cease to have effect.

• (9) At the end of the paragraph there shall be added—

(7) Nothing in— (a) paragraph 10 of Schedule 18 to the Finance Act 1998 (claims or elections in company tax returns), or (b) Schedule 1A to the Management Act (claims or elections not included in returns), shall apply, whether by virtue of section 754 or otherwise, to a claim under sub-paragraph (3) above.

Paragraph 10 of Schedule 24

21

In paragraph 10 of Schedule 24 to the Taxes Act 1988 (capital allowances) in sub-paragraph (1) (which, subject to paragraphs 11 and 12, provides an assumption where capital expenditure is incurred in an accounting period falling before the first accounting period in respect of which a direction is given or which is an ADP exempt period)—

• (a) for “Subject to paragraphs 11 and 12 below," there shall be substituted “ Subject to paragraph 12 below, ”; and

• (b) in paragraph (a), for “a direction is given under section 747(1)" there shall be substituted “ an apportionment under section 747(3) falls to be made ”.

Paragraph 11 of Schedule 24

22

Paragraph 11 of Schedule 24 to the Taxes Act 1988 (power of Board by notice to declare that a specified accounting period is to be treated as the first direction period where it appears that no direction was given as respects that period as a result of capital allowances being claimed) shall cease to have effect.

Paragraph 11A of Schedule 24

23

In paragraph 11A of Schedule 24 to the Taxes Act 1988 (capital allowances) sub-paragraphs (3) and (6) (which relate to the application of paragraph 11(1)(c)) shall cease to have effect.

Transfer pricing

24

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Schedule 25

25

For the heading to Schedule 25 to the Taxes Act 1988 (cases excluded from direction-making powers) there shall be substituted—

.

Paragraph 1 of Schedule 25

26

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Paragraph 2A of Schedule 25

27

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Paragraph 3 of Schedule 25

28

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Paragraph 5 of Schedule 25

29

In paragraph 5(2)(a) of Schedule 25 to the Taxes Act 1988, for “749(3)" there shall be substituted “ 749(5) ”.

Paragraph 6 of Schedule 25

30

• (1) Paragraph 6 of Schedule 25 to the Taxes Act 1988 (exemption for controlled foreign companies engaged in exempt activities) shall be amended as follows.

• (2) In sub-paragraph (1)(c) (which provides that for a company to be engaged in exempt activities, any of sub-paragraphs (2) to (4) must apply) for “(4)" there shall be substituted “ (4A) ”.

• (3) In sub-paragraph (2)(b) (which in certain cases requires less than 50 per cent. of gross trading receipts to be derived from connected or associated persons or persons who have an interest in the company at any time during the accounting period) for “an interest in the company at any time during" there shall be substituted “ a 25 per cent. assessable interest in the company in the case of ”.

• (4) In sub-paragraph (3) (local holding companies) in paragraph (b) (controlled companies which are not themselves holding companies but which are otherwise engaged in exempt activities)—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) after “exempt activities" there shall be inserted “ or are, in terms of sub-paragraph (5A) below, exempt trading companies ”.

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) After sub-paragraph (4B) there shall be inserted—

(4C) For the purposes of sub-paragraph (2)(b) above, a person has a 25 per cent. assessable interest in a controlled foreign company in the case of an accounting period of the company if, on an apportionment of the chargeable profits and creditable tax (if any) of the company for that accounting period under section 747(3), at least 25 per cent. of the controlled foreign company’s chargeable profits for the accounting period would be apportioned to that person.

• (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (9) After sub-paragraph (5) there shall be inserted—

(5A) For the purposes of sub-paragraphs (3) to (4B) above, a company is an exempt trading company throughout any period if— (a) it is a trading company throughout each of its accounting periods which falls wholly or partly within that period; and (b) each of those accounting periods is one as regards which— (i) the condition in section 747(1)(c) is not satisfied; or (ii) the conditions in section 748(1)(e) are satisfied; or (iii) the conditions in section 748(3)(a) and (b) are satisfied.

Paragraph 8 of Schedule 25

31

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Paragraph 12 of Schedule 25

32

• (1) Paragraph 12 of Schedule 25 to the Taxes Act 1988 (meaning of “holding company" in paragraphs 6 and 8(3)) shall be amended as follows.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) In sub-paragraph (5) (exclusion of income derived from certain sources) in paragraph (a)—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) after “engaged in exempt activities" there shall be inserted “ or, in terms of sub-paragraph (5A) of that paragraph, is an exempt trading company ”.

Superior holding companies: supplementary provisions

33

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Paragraph 1 of Schedule 26

34

• (1) In Schedule 26 to the Taxes Act 1988 (reliefs against liability for tax in respect of chargeable profits apportioned to UK resident company) paragraph 1 (trading losses and group relief etc) shall be amended as follows.

• (2) In sub-paragraph (1) (set-off against liability to tax under section 747(4)(a) where UK resident company entitled to deduction in respect of relevant allowance) the following provisions shall cease to have effect—

• (a) paragraph (c) (set-off only available if company has no profits or relevant allowance exceeds profits) and the word “and" immediately preceding that paragraph; and

• (b) in the words following paragraph (c), the words “or, as the case may be, of the excess of it referred to in paragraph (c) above".

• (3) In sub-paragraph (2)(a) (which defines the appropriate accounting period as that for which by virtue of section 754(2) the company is regarded as assessed to corporation tax in respect of the chargeable profits concerned) for “regarded as assessed to corporation tax" there shall be substituted “ chargeable to tax by virtue of this Chapter ”.

• (4) Sub-paragraph (4) (time limit for making claims for group relief) shall cease to have effect.

• (5) Sub-paragraph (6) (which modifies section 43 of the Taxes Management Act 1970 in its application for the purposes of the paragraph) shall cease to have effect.

Paragraph 3 of Schedule 26

35

• (1) Paragraph 3 of Schedule 26 to the Taxes Act 1988 (gains on disposal of shares in controlled foreign companies) shall be amended as follows.

• (2) In sub-paragraph (1), for paragraph (a) (which refers to a direction having been given in respect of an accounting period of a controlled foreign company) there shall be substituted—

(a) an accounting period of a controlled foreign company (“the apportionment period”) is one in respect of which an apportionment under section 747(3) falls to be made; and

.

• (3) Accordingly, in paragraphs (b) and (c) of sub-paragraph (1), for the words “the direction period", in each place where they occur, there shall be substituted “ the apportionment period ”.

• (4) In paragraph (d) of sub-paragraph (1) (which refers to a sum being, under section 747(1)(a), assessed and recoverable from a company) for “assessed on and recoverable from" there shall be substituted “ chargeable on ”.

• (5) In sub-paragraph (3), for “the direction period" there shall be substituted “ the apportionment period ”.

• (6) In sub-paragraph (4), in the words following paragraph (c), for “assessed and recoverable" there shall be substituted “ chargeable under section 747(4)(a) ”.

• (7) After subsection (6) there shall be inserted—

(6A) Nothing in— (a) paragraph 10 of Schedule 18 to the Finance Act 1998 (claims or elections in company tax returns), or (b) Schedule 1A to the Management Act (claims or elections not included in returns), shall apply, whether by virtue of section 754 or otherwise, to a claim under sub-paragraph (6) above.

Paragraph 4 of Schedule 26

36

• (1) Paragraph 4 of Schedule 26 to the Taxes Act 1988 (dividends from the controlled foreign company) shall be amended as follows.

• (2) In sub-paragraph (1), for paragraph (a) (which refers to a direction having been given in respect of an accounting period of a controlled foreign company) there shall be substituted—

(a) an accounting period of a controlled foreign company is one in respect of which an apportionment under subsection (3) of section 747 falls to be made; and

.

• (3) Accordingly, in paragraph (b) of that sub-paragraph for “subsection (3) of that section" there shall be substituted “ that subsection ”.

• (4) In sub-paragraph (2) (which refers to sums assessed on and recoverable from companies in accordance with s.747(4)(a)) for “assessed on and recoverable from" there shall be substituted “ chargeable on ”.

• (5) In sub-paragraph (5)(a) (which refers to the amount of tax assessed on and recoverable from the company in accordance with s.747(4)(a)) for “assessed on and recoverable from" there shall be substituted “ chargeable on ”.

Commencement and transitional provision

37

• (1) The preceding provisions of this Schedule have effect as respects accounting periods of companies resident in the United Kingdom which end on or after the corporation tax self-assessment appointed day.

• (2) Where by virtue of sub-paragraph (1) above any question as to liability (if any) to tax by virtue of Chapter IV of Part XVII of the Taxes Act 1988 as respects any particular accounting period of a non-resident company which ends before the corporation tax self-assessment appointed day falls to be determined—

• (a) in the case of at least one company resident in the United Kingdom, for an accounting period of its which ends on or after that day, and

• (b) in the case of at least one other such company, for an accounting period of its which ends before that day,

such separate determinations and computations shall be made as are necessary for determining the liability of the companies which fall within paragraph (a) above and the liability of the companies which fall within paragraph (b) above.

• (3) For the purposes of sub-paragraph (2) above—

• (a) any question as to the liability (if any) of a company falling within paragraph (a) shall be determined as if, in the case of every company resident in the United Kingdom, the accounting period of the non-resident company ended in an accounting period of the company ending on or after the corporation tax self-assessment appointed day; and

• (b) any question as to the liability (if any) of a company falling within paragraph (b) shall be determined as if, in the case of every company resident in the United Kingdom, the accounting period of the non-resident company ended in an accounting period of the company ending before the corporation tax self-assessment appointed day.

• (4) In this paragraph—

• “accounting period”, in relation to a non-resident company, has the same meaning as it has in Chapter IV of Part XVII of the Taxes Act 1988;

• “the corporation tax self-assessment appointed day” means the day which is the appointed day for the purposes of section 199 of the Finance Act 1994 (corporation tax self-assessment);

• “non-resident company” means a company resident outside the United Kingdom.

SCHEDULE 18

Part I — Introduction

Meaning of “tax"

1

In this Schedule “tax” means corporation tax including, except as otherwise indicated, any amount assessable or chargeable as if it was corporation tax.

Duty to give notice of chargeability

2

• (1) A company which—

• (a) is chargeable to tax for an accounting period, and

• (b) has not received a notice requiring a company tax return,

must give notice to an officer of Revenue and Customs that it is so chargeable.

• (1A) But a company is not required to give notice under sub-paragraph (1) in respect of an accounting period if for the period—

• (a) all the income on which it is chargeable to tax consists of payments on which it bears income tax by deduction, ...

• (b) the company has no chargeable gains , and

• (c) having deducted the income tax mentioned in paragraph (a) at the fourth step in paragraph 8 (calculation of tax payable), the amount of tax payable for the period is nil.

• (2) A notice required to be given under this paragraph must be given within twelve months from the end of the accounting period.

• (2A) Where sub-paragraph (1A) would apply as regards a company if the company were to make a claim to obtain relief under section 6(2)(a) or (3)(a) of TIOPA 2010 in respect of a disposal that has an appropriate connection to a collective investment vehicle for the purposes of paragraph 6 of Schedule 5AAA to TCGA 1992, the company is not required to make such a claim in order to obtain relief in respect of the disposal (despite section 6(6) of TIOPA 2010).

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part II — Company tax return

Company tax return

3

• (1) An officer of Revenue and Customs may by notice require a company to deliver a return (a “company tax return") of such information, accounts, statements and reports—

• (a) relevant to the tax liability of the company, or

• (b) otherwise relevant to the application of the Corporation Tax Acts to the company,

as may reasonably be required by the notice.

• (2) Different information, accounts, statements and reports may be required from different descriptions of company.

• (3) A company tax return must include a declaration by the person making the return that the return is to the best of his knowledge correct and complete.

• (4) The return must be delivered to the officer of the Board by whom the notice was issued not later than the filing date.

• (5) Sub-paragraph (1)(b) has effect as if the reference to the Corporation Tax Acts included a reference to sections 911 and 912 of the Income Tax Act 2007.

3A

• (1) Her Majesty's Revenue and Customs may from time to time publish requirements as to the information, accounts, statements and reports which a company must deliver as part of its company tax return where the company has a tax liability by virtue of paragraph 50 or 51 of Schedule 19 to the Finance Act 2011 (the bank levy); and such information, accounts, statements and reports must be delivered as if the notice to the company under paragraph 3(1) had required them to be delivered (and paragraph 4 is to be read accordingly).

• (2) The publication of any requirements under sub-paragraph (1) does not stop a notice under paragraph 3(1) requiring the delivery of any additional information, accounts, statements and reports as part of a company tax return.

Meaning of delivery of return

4

References in this Schedule to the delivery of a company tax return are to the delivery of all the information, accounts, statements and reports required to comply with the notice requiring the return.

Period for which return required

5

• (1) A notice requiring a company tax return must specify the period to which the notice relates.

• (2) If an accounting period of the company ended during (or at the end of) the specified period, a return is required for that accounting period.

If there is more than one, a separate company tax return is required for each of them.

• (3) If sub-paragraph (2) does not apply but an accounting period of the company began during the specified period, a company tax return is required for the part of the specified period before the accounting period began.

• (4) If the company was outside the charge to corporation tax for the whole of the specified period, a company tax return is required for the whole of the specified period.

• (5) If none of the above provisions applies, no company tax return is required in response to the notice.

Notice relating to period beginning before appointed day

6

• (1) A notice requiring a company tax return may be given on or after the self-assessment appointed day in relation to a period beginning before that day.

• (2) Where the effect of such a notice is to require a return for an accounting period ending before that day, the provisions of the Tax Acts apply as if it were a notice under section 11 of the Taxes Management Act 1970.

• (3) The provisions of this Act relating to company tax returns, or amending other provisions of the Tax Acts so as to refer to such returns, do not affect the operation of those Acts in relation to such a notice.

Return to include self-assessment

7

• (1) Every company tax return for an accounting period must include an assessment (a “self-assessment") of the amount of tax which is payable by the company for that period—

• (a) on the basis of the information contained in the return, and

• (b) taking into account any relief or allowance for which a claim is included in the return or which is required to be given in relation to that accounting period.

• (2) For this purpose a company tax return is regarded as a return for an accounting period if the period is treated in the return as an accounting period and is not longer than twelve months, even though it is not, or may not be, an accounting period.

Residential property developer tax

7A

• (1) A residential property developer must include in its company tax return for an accounting period a statement of—

• (a) its RPD profits in relation to the accounting period,

• (b) its adjusted trading profits or adjusted trading losses for that period,

• (c) the amount of any joint venture profits that are attributable to the developer for that period,

• (d) any allowable RPDT loss relief which the developer is given for that period,

• (e) any allowable RPDT group relief claimed by the developer for that period,

• (f) any allowable RPDT group relief for carried-forward losses claimed by the developer for that period, and

• (g) its allowance for that period,

unless sub-paragraph (2) applies in relation to the accounting period.

• (2) This sub-paragraph applies where it is reasonable to assume that the developer would have no liability to residential property developer tax in relation to the accounting period if no amount were deducted in the calculation at section 38 of the Finance Act 2022 in relation to that accounting period in respect of any—

• (a) allowable RPDT loss relief,

• (b) allowable RPDT group relief, or

• (c) allowable RPDT group relief for carried-forward losses.

• (3) Terms used in Part 2 of the Finance Act 2022 have the same meaning in this paragraph as in that Part (unless the contrary intention appears).

Energy (oil and gas) profits levy

7B

• (1) A company which has made any qualifying levy profits or loss in an accounting period must include in its company tax return for the accounting period a statement of—

• (a) the qualifying levy profits or loss, and

• (b) any relief which the company is given for that period under Schedule 1 to the Energy (Oil and Gas) Profits Levy Act 2022.

• (2) Terms used in the Energy (Oil and Gas) Profits Levy Act 2022 have the same meaning in this paragraph as in that Act.

Calculation of tax payable

8

• (1) The amount of tax payable for an accounting period is calculated as follows.

• First stepCalculate the corporation tax chargeable on the company’s profits:Take the amount of the company’s profits for that period on which corporation tax is chargeable (see section 4(1) and (2) of the Corporation Tax Act 2010).Apply the rate or rates of corporation tax applicable to the company (other than the restitution payments rate).

• Second stepThen give effect to any reliefs or set-offs available against corporation tax chargeable on profits:Any reduction under Part 3A or Chapter 3A of Part 8 of the Corporation Tax Act 2010 (marginal relief for companies with small profits).Any relief under Part V of Schedule 15 to the Finance Act 2000 (corporate venturing scheme: investment relief).Any relief under Part 7 of the Corporation Tax Act 2010 (community investment tax relief).Any double taxation relief under under sections 2 and 6 of TIOPA 2010 or under section 18(1)(b) and (2) of that Act.Any set off for advance corporation tax under section 239 of the Taxes Act 1988 or under regulations made under section 32 of this Act.

• Third stepThen add any amounts assessable or chargeable as if they were corporation tax (reduced by any reliefs specific to those amounts):Any amount due under section 455 or 464A of the Corporation Tax Act 2010 (tax on a loan, advance or benefit to a participator). Any sum chargeable under section 269DA of that Act (surcharge on banking companies). Any sum chargeable under section 330(1) of that Act (supplementary charge in respect of ring fence trades). Any sum charged at step 5 in section 371BC(1) of the Taxation (International and Other Provisions) Act 2010 (controlled foreign companies). Any amount of the bank levy chargeable by virtue of paragraph 50 or 51 of Schedule 19 to the Finance Act 2011 (the bank levy). Any amount of residential property developer tax chargeable by virtue of section 33 of the Finance Act 2022. Any amount chargeable by virtue of section 1 of the Energy (Oil and Gas) Profits Levy Act 2022.

• Fourth stepThen deduct any amounts to be set off against the company’s overall tax liability for that period:Any amount to be set off under section 967 or 968 of the Corporation Tax Act 2010 (income tax borne by deduction).Any amount to be set off under section 246N or 246Q of the Taxes Act 1988 (advance corporation tax paid in respect of foreign income dividend).

• Fifth stepCalculate the corporation tax chargeable on any profits of the company that are charged as restitution interest.Find the amount in respect of which the company is chargeable for the period under the charge to corporation tax on income under Part 8C of CTA 2010.Apply the restitution payments rate in accordance with section 357YK(1) of that Act.The amount of tax payable for the accounting period is the sum of the amounts resulting from the first to fourth steps and this step.

• (1A) Sub-paragraph (1B) applies if an amount of the bank levy chargeable by virtue of paragraph 50 or 51 of Schedule 19 to the Finance Act 2011 (the bank levy) is added at the third step.

• (1B) Any deductions made at the fourth step are to be treated as made from all other amounts before being made from the amount of the bank levy.

• (2) Except as otherwise provided, references in this Schedule to the amount of tax payable by a company for an accounting period are to the amount shown in the company’s self-assessment as the amount payable.

Claims that cannot be made without a return

9

• (1) No claim to which this paragraph applies may be made by a company before it delivers a company tax return for the period to which the claim relates.

• (2) This paragraph applies to a claim by a company for any repayment of income tax called for by virtue of—

• (a) section 3 of the Corporation Tax Act 2009 (exclusion of income tax charge in case of UK resident company or income within chargeable profits for corporation tax), or

• (b) exemptions from income tax conferred by the Corporation Tax Acts.

This is subject to sub-paragraphs (2A) and (2B).

• (2A) This paragraph does not apply to a claim by a company for repayment of income tax treated as having been paid by virtue of—

• (a) section 471 of the Corporation Tax Act 2010 (gifts qualifying for gift aid relief: charitable companies),

• (b) section 475 of that Act (gifts qualifying for gift aid relief: eligible bodies), or

• (c) section 661D of that Act (gifts qualifying for gift aid relief: community amateur sports clubs).

• (2B) This paragraph also does not apply to a claim by a company for repayment of income tax deducted at source from income which is exempt from tax by virtue of—

• (a) section 486 of the Corporation Tax Act 2010 (investment income and non-trading profits from loan relationships),

• (b) section 487 of that Act (public revenue dividends),

• (c) section 488 of that Act (certain miscellaneous income),

• (d) section 489 of that Act (income from estates in administration), or

• (e) section 664 of that Act (interest and gift aid income: community amateur sports clubs).

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) This paragraph applies to a claim by a company for relief under Part V of Schedule 15 to the Finance Act 2000 (corporate venturing scheme: investment relief).

Other claims and elections to be included in return

10

• (1) In Part VII of this Schedule (general provisions as to claims and elections) paragraphs 57 to 59 contain provisions as to the circumstances in which a claim or election may or must be made, or is to be treated as having been made, in a company tax return.

• (2) A claim to which Part VIII, IX or IXA of this Schedule applies (claims for group relief, capital allowances, first-year tax credits, R&D expenditure credits or R&D tax relief) can only be made by being included in a company tax return (see paragraphs 67, 79, 83ZA and 83B).

• (2A) A claim to which Part 9B of this Schedule applies (claims for land remediation tax credit and life assurance company tax credit) can only be made by being included in a company tax return (see paragraph 83H).

• (2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) A claim to which Part 9D of this Schedule applies (certain claims under Parts 14A to 15E of the Corporation Tax Act 2009) can only be made by being included in a company tax return (see paragraph 83T).

• (4A) An election under section 1179B of the Corporation Tax Act 2009 (opting into Part 14A of that Act) can only be made by being included in a company tax return.

• (5) An election under section 1182(7) of the Corporation Tax Act 2009 (election not to be a film production company) can only be made by being included in a company tax return (see section 1182(8)(a) of that Act).

• (6) An election under section 1216AE(7) of the Corporation Tax Act 2009 (election not to be a television production company) can only be made by being included in a company tax return (see section 1216AE(8)(a) of that Act).

• (7) An election under section 1217AB(6) of the Corporation Tax Act 2009 (election not to be a video games development company) can only be made by being included in a company tax return (see section 1217AB(7)(a) of that Act).

Accounts required in case of Companies Act company

11

• (1) In the case of a company which—

• (a) is required to deliver a company tax return for a period,

• (b) is resident in the United Kingdom throughout that period, and

• (c) is required under the Companies Act 2006 to prepare accounts for a period consisting of or including the whole of that period,

the power to require the delivery of accounts as part of the return is limited to such accounts, containing such information and having annexed to them such documents, as are required to be prepared under that Act.

• (2) Sub-paragraph (1) does not affect—

• (a) the power to require the delivery of accounts, information or documents in relation to a company's tax liability by virtue of paragraph 50 or 51 of Schedule 19 to the Finance Act 2011 (the bank levy), or

• (b) the requirements which may be imposed under paragraph 3A.

Information about business carried on in partnership

12

• (1) A company tax return of a company which carries on a trade, profession or business in partnership must include any amount which in a relevant partnership statement is stated to be its share of any income, loss, consideration, tax, credit or charge.

• (2) A “relevant partnership statement” means a statement under section 12AB of the Taxes Management Act 1970 for the period for which the return is made or a period which includes that period or any part of it.

Information about chargeable gains

13

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Filing date

14

• (1) The filing date for a company tax return is the last day of whichever of the following periods is the last to end—

• (a) twelve months from the end of the period for which the return is made;

• (b) if the company’s relevant period of account is not longer than 18 months, twelve months from the end of that period;

• (c) if the company’s relevant period of account is longer than 18 months, 30 months from the beginning of that period;

• (d) three months from the date on which the notice requiring the return was served.

• (2) In sub-paragraph (1) “relevant period of account” means, in relation to a return for an accounting period, the period of account of the company in which the last day of that accounting period falls.

. . .

Amendment of return by company

15

• (1) A company may amend its company tax return by notice to an officer of Revenue and Customs.

• (2) The notice must be in such form as an officer of Revenue and Customs may require.

• (3) The notice must contain such information and be accompanied by such statements as an officer of Revenue and Customs may reasonably require.

• (4) Except as otherwise provided, an amendment may not be made more than twelve months after—