Corporation Tax Act 2009

• (4) In subsection (2A)—

• (a) for the words from “, 703” to “790” substitute “ or 776 ”, and

• (b) omit paragraph (b).

• (5) In subsection (6), in the definition of “income”, for paragraph (b) substitute—

(b) any profits or gains or other income— (i) which is chargeable to corporation tax under Part 3 of the Corporation Tax Act 2009 in respect of a trade carried on wholly or partly in the United Kingdom, or (ii) which is chargeable to corporation tax under or by virtue of any provision to which section 834A of the Taxes Act 1988 applies, and which (in either case) is not, apart from this section, exempted from corporation tax chargeable under or by virtue of that Part or provision.

464

Omit section 50 (phasing out of relief for payments to trustees of profit sharing schemes).

465

Omit section 69(1) (which introduces Schedule 20).

466

Omit section 143(2) (power to provide incentives to use electronic communications).

467

In Schedule 12 (provision of services through an intermediary) omit paragraphs 17 and 18.

468

In Schedule 15 (the corporate venturing scheme) in paragraph 60(1) omit “under Case VI of Schedule D”.

469

Omit Schedule 20 (tax relief for expenditure on research and development).

470

• (1) Amend Schedule 22 (tonnage tax) as follows.

• (2) In paragraph 50(2)—

• (a) in paragraph (a) for “Chapter II of Part IV of the Finance Act 1996” substitute “ Part 5 of the Corporation Tax Act 2009 ”, and

• (b) in paragraph (c) for “under Schedule 26 to the Finance Act 2002 (derivative contracts)” substitute “ in accordance with Part 7 of the Corporation Tax Act 2009 (derivative contracts) ”.

• (3) For paragraph 51(3) and (4) substitute—

(3) For the purposes of this paragraph “income from investments” includes anything chargeable to tax under— (a) Part 4 of the Corporation Tax Act 2009 (property income), (b) section 299 of that Act (loan relationships: non-trading profits), (c) Chapter 5 of Part 10 of that Act (distributions from unauthorised unit trusts), or (d) Chapter 7 of that Part (annual payments not otherwise charged).

• (4) In paragraph 61(6) for “Chapter II of Part IV of the Finance Act 1996” substitute “ Part 5 of the Corporation Tax Act 2009 ”.

• (5) In paragraph 62(6) for “Chapter II of Part IV of the Finance Act 1996” substitute “ Part 5 of the Corporation Tax Act 2009 ”.

• (6) In paragraph 63(2)—

• (a) in paragraph (a) for “Chapter II of Part IV of the Finance Act 1996” substitute “ Part 5 of the Corporation Tax Act 2009 ”,

• (b) in paragraph (b) for “under Schedule 26 to the Finance Act 2002 (derivative contracts)” substitute “ in accordance with Part 7 of the Corporation Tax Act 2009 (derivative contracts) ”, and

• (c) in paragraph (c) for “section 103(1A) of the Finance Act 1996” substitute “ section 475 of the Corporation Tax Act 2009 ”.

Transport Act 2000 (c. 38)

471

The Transport Act 2000 is amended as follows.

472

• (1) Amend Schedule 7 (transfer schemes: tax) as follows.

• (2) In paragraph 12(5) for “section 100 of the 1988 Act” substitute “ section 163 of the Corporation Tax Act 2009 ”.

• (3) In paragraph 17—

• (a) in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act 1996” substitute “ Part 5 of the Corporation Tax Act 2009 ”, and

• (b) in sub-paragraph (3) for “Chapter II of Part IV of the Finance Act 1996” and “that Chapter” substitute “ Part 5 of the Corporation Tax Act 2009 ” and “ that Part ” respectively.

473

• (1) Amend Schedule 26 (transfers: tax) as follows.

• (2) In paragraph 7—

• (a) in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act 1996” substitute “ Part 5 of the Corporation Tax Act 2009 ”, and

• (b) in sub-paragraph (4) for “Chapter II of Part IV of the Finance Act 1996” and “that Chapter” substitute “ Part 5 of the Corporation Tax Act 2009 ” and “ that Part ” respectively.

• (3) For paragraph 13(1) substitute—

(1) Sub-paragraphs (2) to (4) apply if— (a) the transferor ceased to carry on a trade by virtue of a relevant transfer taking effect, and (b) on the taking effect of that transfer, the transferee began to carry on the trade. This sub-paragraph is to be read with sub-paragraph (8).

• (4) In paragraph 17—

• (a) in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act 1996” substitute “ Part 5 of the Corporation Tax Act 2009 ”, and

• (b) in sub-paragraph (3) for “Chapter II of Part IV of the Finance Act 1996” and “that Chapter” substitute “ Part 5 of the Corporation Tax Act 2009 ” and “ that Part ” respectively.

• (5) In paragraph 29—

• (a) in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act 1996” substitute “ Part 5 of the Corporation Tax Act 2009 ”, and

• (b) in sub-paragraph (3) for “Chapter II of Part IV of the Finance Act 1996” and “that Chapter” substitute “ Part 5 of the Corporation Tax Act 2009 ” and “ that Part ” respectively.

• (6) In paragraph 35—

• (a) in sub-paragraph (1) for “paragraph 11 of Schedule 9 to the Finance Act 1996” substitute “ section 444 of the Corporation Tax Act 2009 ”, and

• (b) in sub-paragraph (2) for “Chapter II of Part IV of the Finance Act 1996” and “that Chapter” substitute “ Part 5 of the Corporation Tax Act 2009 ” and “ that Part ” respectively.

Capital Allowances Act 2001 (c. 2)

474

The Capital Allowances Act 2001 is amended as follows.

475

In section 2(4) (general means of giving effect to capital allowances) for “section 6 of ICTA” substitute “ Part 2 of CTA 2009 (see section 2(2) of that Act) ”.

476

In section 15(1)(f) (qualifying activities) for “section 55(2) of ICTA” substitute “ section 39(4) of CTA 2009 ”.

477

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

478

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

479

• (1) Amend section 18 (managing investments of a company with investment business) as follows.

• (2) In subsection (1) for “section 75 of ICTA” substitute “ section 1219 of CTA 2009 ”.

• (3) In subsection (2) for “section 130 of ICTA” substitute “ section 1218 of CTA 2009 ”.

480

In section 28(2B)(a) (thermal insulation of buildings) for “section 31ZA of ICTA” substitute “ section 251 of CTA 2009 ”.

481

In section 38 (production animals etc) for paragraphs (a) and (b) substitute—

(a) animals or other creatures to which section 30 of ITTOIA 2005 or section 50 of CTA 2009 (animals kept for trade purposes) applies, (b) animals or other creatures to which Chapter 8 of Part 2 of ITTOIA 2005 or Chapter 8 of Part 3 of CTA 2009 (herd basis rules) applies, or (c) shares in animals or creatures such as are mentioned in paragraph (a) or (b).

482

• (1) Amend section 63 (cases in which disposal value is nil) as follows.

• (2) In subsection (2)(c) for “section 84 of ICTA” substitute “ section 106 of CTA 2009 ”.

• (3) In subsection (4) for “sections 83A(4) and 84(4) of ICTA” substitute “ section 108 of CTA 2009 ”.

483

In section 105(3)(a) (“profits chargeable to tax”) for “section 830(4) of ICTA” substitute “ section 1313(2) of CTA 2009 ”.

484

• (1) Amend section 106 (the designated period) as follows.

• (2) In subsection (3)(b) for the words from “each of which” to the end substitute “ each of which there was a change in the persons carrying on the qualifying activity in relation to which Condition A or Condition B was met. ”

• (3) After subsection (3) insert—

(3A) Condition A is that— (a) at least one person who carried on the qualifying activity immediately before or immediately after the change was within the charge to income tax in respect of that activity, and (b) at least one person who carried on the qualifying activity before the change continued to carry it on after the change. (3B) Condition B is that— (a) the qualifying activity was carried on in partnership both immediately before and immediately after the change, (b) a company that was within the charge to corporation tax in respect of the activity carried it on immediately before or immediately after the change, and (c) at least one company which carried the activity on before the change continued to carry it on after the change.

485

• (1) Amend section 108 (effect of disposal to connected person on overseas leasing pool) as follows.

• (2) In subsection (1)(b) for the words from “is one” to “reconstructions)” substitute

does not occur on the occasion of a change in the persons carrying on the qualifying activity— (i) which falls within section 343(1) of ICTA (company reconstructions without change of ownership), or (ii) in relation to which Condition A or Condition B is met

.

• (3) After subsection (1) insert—

(1A) Condition A is that— (a) at least one person who carried on the qualifying activity immediately before or immediately after the change was within the charge to income tax in respect of that activity, and (b) at least one person who carried on the qualifying activity before the change continued to carry it on after the change. (1B) Condition B is that— (a) the qualifying activity was carried on in partnership both immediately before and immediately after the change, (b) a company that was within the charge to corporation tax in respect of the activity carried it on immediately before or immediately after the change, and (c) at least one company which carried the activity on before the change continued to carry it on after the change.

486

• (1) Amend section 112 (excess allowances: connected persons) as follows.

• (2) In subsection (1) for paragraph (b) and the “and” immediately after that paragraph substitute—

(b) the transaction was not effected (or, if more than one, none of the transactions was effected) on the occasion of a change in the persons carrying on the qualifying activity— (i) which falls within section 343(1) of ICTA (company reconstructions without change of ownership), or (ii) in relation to which Condition A or Condition B is met, and

.

• (3) After subsection (1) insert—

(1A) Condition A is that— (a) at least one person who carried on the qualifying activity immediately before or immediately after the change was within the charge to income tax in respect of that activity, and (b) at least one person who carried on the qualifying activity before the change continued to carry it on after the change. (1B) Condition B is that— (a) the qualifying activity was carried on in partnership both immediately before and immediately after the change, (b) a company that was within the charge to corporation tax in respect of the activity carried it on immediately before or immediately after the change, and (c) at least one company which carried the activity on before the change continued to carry it on after the change.

487

• (1) Amend section 115 (prohibited allowances: connected persons) as follows.

• (2) In subsection (1) for paragraph (c) and the “and” immediately after that paragraph substitute—

(c) the transaction was not effected (or, if more than one, none of the transactions was effected) on the occasion of a change in the persons carrying on the qualifying activity— (i) which falls within section 343(1) of ICTA (company reconstructions without change of ownership), or (ii) in relation to which Condition A or Condition B is met, and

.

• (3) After subsection (1) insert—

(1A) Condition A is that— (a) at least one person who carried on the qualifying activity immediately before or immediately after the change was within the charge to income tax in respect of that activity, and (b) at least one person who carried on the qualifying activity before the change continued to carry it on after the change. (1B) Condition B is that— (a) the qualifying activity was carried on in partnership both immediately before and immediately after the change, (b) a company that was within the charge to corporation tax in respect of the activity carried it on immediately before or immediately after the change, and (c) at least one company which carried the activity on before the change continued to carry it on after the change.

488

• (1) Amend section 122 (short-term leasing by buyer, lessee, etc) as follows.

• (2) In subsection (2)(c) for the words from “on the occasion of each of which” to the end substitute “ on the occasion of each of which there was a change in the persons carrying on the qualifying activity in relation to which Condition A or B was met. ”

• (3) After subsection (2) insert—

(2A) Condition A is that— (a) at least one person who carried on the qualifying activity immediately before or immediately after the change was within the charge to income tax in respect of that activity, and (b) at least one person who carried on the qualifying activity before the change continued to carry it on after the change. (2B) Condition B is that— (a) the qualifying activity was carried on in partnership both immediately before and immediately after the change, (b) a company that was within the charge to corporation tax in respect of the activity carried it on immediately before or immediately after the change, and (c) at least one company which carried the activity on before the change continued to carry it on after the change.

489

• (1) Amend section 125 (other qualifying purposes) as follows.

• (2) In subsection (3)(c) for the words from “on the occasion of each of which” to the end substitute “ on the occasion of each of which there was a change in the persons carrying on the qualifying activity in relation to which Condition A or B was met. ”

• (3) After subsection (3) insert—

(3A) Condition A is that— (a) at least one person who carried on the qualifying activity immediately before or immediately after the change was within the charge to income tax in respect of that activity, and (b) at least one person who carried on the qualifying activity before the change continued to carry it on after the change. (3B) Condition B is that— (a) the qualifying activity was carried on in partnership both immediately before and immediately after the change, (b) a company which was within the charge to corporation tax in respect of the activity carried it on immediately before or immediately after the change, and (c) at least one company which carried the activity on before the change continued to carry it on after the change.

490

In section 252 (mines, transport undertakings etc) for “section 55(2) of ICTA” substitute “ section 39(4) of CTA 2009 ”.

491

• (1) Amend section 253 (companies with investment business) as follows.

• (2) In subsection (2) for “section 75(4) of ICTA” substitute “ section 1233 of CTA 2009 ”.

• (3) In subsection (4) for “Case I of Schedule D” substitute “ Part 3 of CTA 2009 ”.

• (4) In subsection (6) for “section 75(4) of ICTA” substitute “ section 1233 of CTA 2009 ”.

492

• (1) Amend section 256 (different giving effect rules for different categories of business) as follows.

• (2) In subsection (2)(b) for the words from “amount” to the end substitute “ company as receiving for the chargeable period in question an amount which is equal to the amount of the charges (or parts of charges) and to which the charge to corporation tax on income applies ”.

• (3) In subsection (4) for “under Case VI of Schedule D” substitute “ chargeable under section 436A of ICTA ”.

493

In section 257(2)(a) (supplementary) for “Case I” substitute “ life assurance trade ”.

494

In section 260(8) (special leasing: corporation tax (excess allowance)) for “section 6 of ICTA (charge to corporation tax etc)” substitute “ Part 2 of CTA 2009 (see section 2(2) of that Act) ”.

495

• (1) Amend section 263 (qualifying activities carried on in partnership) as follows.

• (2) For subsection (1)(c) substitute—

(c) if the qualifying activity is a trade or property business, the condition in subsection (1A) or (1B) (whichever is appropriate) is met.

• (3) For subsection (1A) substitute—

(1A) For income tax purposes, the condition is that a person carrying on the trade or property business immediately before the change continues to carry it on after the change. (1B) For corporation tax purposes, the condition is that a company carrying on the trade or property business in partnership immediately before the change continues to carry it on in partnership after the change.

496

• (1) Amend section 265 (successions: general) as follows.

• (2) For subsection (1)(b) substitute—

(b) if the qualifying activity is a trade or property business, the condition in subsection (1A) or (1B) (whichever is appropriate) is met.

• (3) For subsection (1A) substitute—

(1A) For income tax purposes, the condition is that no person carrying on the trade or property business immediately before the succession continues to carry it on after the succession. (1B) For corporation tax purposes, the condition is that no company carrying on the trade or property business in partnership immediately before the succession continues to carry it on in partnership after the succession.

497

In section 282 (buildings outside the United Kingdom) for the words from “or that apply” to the end substitute “ or corporation tax purposes. ”

498

In section 291(3)(a) (supplementary provisions with respect to elections) for “section 38(1) to (4) and (6) of ICTA,” substitute “ sections 243 and 244 of CTA 2009, ”.

499

In section 326(1) (interpretation of section 325), in the definition of “premium” for paragraph (a) and the “or” immediately after it substitute—

(a) an amount brought into account as a receipt in calculating the profits of a property business under sections 217 to 221 of CTA 2009 that is calculated by reference to the sum, or

.

500

In section 331(1)(b) (meaning of “capital value”) for sub-paragraph (i) and the “or” immediately after it substitute—

(i) an amount brought into account as a receipt in calculating the profits of a property business under sections 217 to 221 of CTA 2009 that is calculated by reference to the sum, or

.

501

• (1) Amend section 353 (lessors and licensors) as follows.

• (2) In subsection (2) omit “, or a Schedule A business,”.

• (3) In subsection (4) for “Schedule A business” substitute “ UK property business ”.

502

• (1) Amend section 354 (buildings temporarily out of use) as follows.

• (2) In subsection (3), in the words after paragraph (b)—

• (a) for “section 105 of ICTA” substitute “ section 196 of CTA 2009 ”, and

• (b) for “section 103 or 104(1) of ICTA” substitute “ Chapter 15 of Part 3 of CTA 2009 ”.

• (3) In subsection (5) for “section 18 of ITTOIA 2005 or section 337(1) of ICTA” substitute “ section 577(2A) of this Act or section 18 of ITTOIA 2005 ”.

503

In section 390(1) (interpretation of section 389), in the definition of “premium” for paragraph (a) and the “or” immediately after it substitute—

(a) an amount brought into account as a receipt in calculating the profits of a UK property business under sections 217 to 221 of CTA 2009 that is calculated by reference to the sum, or

.

504

• (1) Amend section 392 (UK property business and Schedule A business) as follows.

• (2) In subsection (2) omit “, or a Schedule A business,”.

• (3) In subsection (2A)—

• (a) omit the words from “is within” to “and he”, and

• (b) for “treating him as if he had been carrying on” substitute “ treating the person as having carried on ”.

• (4) Omit subsection (3).

• (5) For the title substitute “ UK property businesses ”.

505

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

506

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

507

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

508

• (1) Amend section 406 (reduction where premium relief previously allowed) as follows.

• (2) In subsection (1)(b) for “sections 87 and 87A of ICTA” substitute “ sections 62 to 67 of CTA 2009 ”.

• (3) In subsection (2) for “sections 87 and 87A of ICTA” substitute “ sections 62 to 67 of CTA 2009 ”.

509

In section 454(1)(c) (qualifying expenditure) for “section 531(3)(a) of ICTA” substitute “ section 178 of CTA 2009 ”.

510

In section 455(4) (excluded expenditure) for “section 531(2) of ICTA” substitute “ section 178(3) of CTA 2009 ”.

511

In section 462(3) (disposal values) for “section 531(2) of ICTA” substitute “ section 178(2) of CTA 2009 ”.

512

In section 481(5)(b) (anti-avoidance: limit on qualifying expenditure) for “section 524 of ICTA” substitute “ section 912 of CTA 2009 ”.

513

In section 483(c) (meaning of “income from patents”) for “section 524 or 525 of ICTA” substitute “ section 912 or 918 of CTA 2009 ”.

514

In section 488(3)(a) (balancing allowances) for “section 18 of ITTOIA or section 337(1) of ICTA” substitute “ section 577(2A) of this Act or section 18 of ITTOIA 2005 ”.

515

• (1) Amend section 529 (giving effect to allowances and charges) as follows.

• (2) In subsection (1) omit “, or a Schedule A business,”.

• (3) In subsection (1A)—

• (a) omit the words from “is within” to “and he”, and

• (b) for “treating him as if he had been carrying on” substitute “ treating the person as having carried on ”.

• (4) Omit subsection (2).

516

In section 536(5)(a)(v) (contributions not made by public bodies and not eligible for tax relief) for “section 55(2) of ICTA” substitute “ section 39(5) of CTA 2009 ”.

517

In section 545(4) (investment assets) for “Case I of Schedule D” substitute “ section 35 of CTA 2009 (charge on trade profits) ”.

518

• (1) Amend section 558 (effect of partnership changes) as follows.

• (2) For subsection (1)(c) substitute—

(c) the condition in subsection (1A) or (1B) (whichever is appropriate) is met.

• (3) After subsection (1) insert—

(1A) For income tax purposes, the condition is that a person carrying on the relevant activity immediately before the change continues to carry it on after the change. (1B) For corporation tax purposes, the condition is that a company carrying on the relevant activity in partnership immediately before the change continues to carry it on in partnership after the change.

519

• (1) Amend section 559 (effect of successions) as follows.

• (2) For subsection (1)(b) substitute—

(b) the condition in subsection (1A) or (1B) (whichever is appropriate) is met.

• (3) For subsection (1A) substitute—

(1A) For income tax purposes, the condition is that no person carrying on the relevant activity immediately before the succession continues to carry it on after the succession. (1B) For corporation tax purposes, the condition is that no company carrying on the relevant activity in partnership immediately before the succession continues to carry it on in partnership after the succession.

520

• (1) Amend section 577 (other definitions) as follows.

• (2) In subsection (1), in the definition of “property business” omit “, a Schedule A business”.

• (3) After subsection (2) insert—

(2A) A person's ceasing to carry on a trade, property business, profession or vocation is treated for the purposes of this Act as the permanent discontinuance of the trade, property business, profession or vocation, whether or not it is in fact discontinued. (2B) For income tax purposes, a change in the persons carrying on a trade, property business, profession or vocation is not treated as the permanent discontinuance of the trade, property business, profession or vocation if a person carrying it on immediately before the change continues to carry it on after the change. (2C) For corporation tax purposes, a change in the persons carrying on a trade or property business is not treated as the permanent discontinuance of the trade or property business if a company carrying it on in partnership immediately before the change continues to carry it on in partnership after the change.

521

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

522

• (1) Amend Schedule 1 (abbreviations and defined expressions) as follows.

• (2) In Part 1 at the end insert—

CTA 2009	The Corporation Tax Act 2009

• (3) In Part 2—

• (a) in the entry for “accounting period”, in the second column, for “section 12 of ICTA” substitute “ Chapter 2 of Part 2 of CTA 2009 ”,

• (b) after the entry for “car (in Part 2)” insert—

the charge to corporation tax on income	section 2(3) of CTA 2009 (as applied by section 834(1) of ICTA)

,

• (c) in the entry for “overseas property business”, for the words in the second column substitute “ Chapter 2 of Part 3 of ITTOIA 2005 (as applied by section 989 of ITA 2007) and Chapter 2 of Part 4 of CTA 2009 (as applied by section 834B of ICTA) ”,

• (d) omit the entry for “Schedule A business”, and

• (e) in the entry for “UK property business”, in the second column, at the end insert “ and Chapter 2 of Part 4 of CTA 2009 (as applied by section 834B of ICTA) ”.

Finance Act 2001 (c. 9)

523

The Finance Act 2001 is amended as follows.

524

Omit section 70(1) and (2) (which introduces Schedule 22).

525

Omit Schedule 22 (remediation of contaminated land).

Finance Act 2002 (c. 23)

526

The Finance Act 2002 is amended as follows.

527

Omit section 53 (which introduces Schedule 12 to that Act).

528

Omit section 54 (which introduces Schedules 13 and 14 to that Act).

529

Omit section 55 (gifts of medical supplies and equipment).

530

Omit section 64 (adjustment on change of basis).

531

• (1) Amend section 65 (postponement of change to mark to market in certain cases) as follows.

• (2) In subsection (1) for “of Case I of Schedule D” substitute “ applicable for the purposes of section 35 of the Corporation Tax Act 2009 (charge on trade profits) ”.

• (3) In subsection (2)(b) for “section 42 of the Finance Act 1998 (c. 36) ” substitute “ section 46 of the Corporation Tax Act 2009 ”.

532

Omit section 71 (accounting method where rate of interest etc is reset).

533

In section 81(3)(b) (transitional provision) for “Chapter 2 of Part 4 of the Finance Act 1996” substitute “ Part 5 of the Corporation Tax Act 2009 ”.

534

In section 83 (derivative contracts) omit subsections (1)(a) and (2).

535

Omit section 84(1) (gains and losses from intangible fixed assets of company).

536

Omit Schedule 12 (tax relief for expenditure on research and development).

537

Omit Schedule 13 (tax relief for expenditure on vaccine research etc).

538

In Schedule 16 (community investment tax relief) in paragraph 27(4) omit “under Case VI of Schedule D”.

539

• (1) Amend Schedule 18 (relief for community amateur sports clubs) as follows.

• (2) In paragraph 4(4) for the words from “means” to the end substitute

profits that (apart from this paragraph) are chargeable under Chapter 2 of Part 3 of CTA 2009 and are— (a) means profits of a trade carried on wholly or partly in the United Kingdom, or (b) profits of an activity other than a trade.

• (3) In paragraph 5(3)(a) for the words from “on” to the end substitute “ which (apart from this paragraph) would be required to be brought into account under Part 5 of the Corporation Tax Act 2009 (loan relationships) as a non-trading credit of the club; ”.

• (4) Omit paragraph 9(3)(a).

540

Omit Schedule 22 (computation of profits: adjustment on change of basis).

541

• (1) Amend Schedule 23 (exchange gains and losses from loan relationships etc) as follows.

• (2) Omit paragraph 25 (anti-avoidance: change of accounting period).

• (3) In paragraph 26 (deferred foreign exchange gains)—

• (a) in sub-paragraph (2)—

• (i) in paragraph (a) for “Chapter 2 of Part 4 of the Finance Act 1996 (c. 8)” substitute “ Part 5 of the Corporation Tax Act 2009 ”,

• (ii) in paragraph (b) for “that Chapter” substitute “ that Part ”, and

• (iii) in paragraph (c) for “section 82(2) of the Finance Act 1996” substitute “ section 297(2) of the Corporation Tax Act 2009 ”, and

• (b) in sub-paragraph (5) for “subsection (8) of section 84A of the Finance Act 1996” and “subsection (9)” substitute “ section 328(5) of the Corporation Tax Act 2009 ” and “ subsection (6) ” respectively.

542

In Schedule 25 (loan relationships) omit paragraphs 61 to 64.

543

Omit Schedule 26 (derivative contracts).

544

• (1) Schedule 28 (derivative contracts: transitional provisions etc) is amended as follows.

• (2) Omit paragraph 1 (anti-avoidance: change of accounting period).

• (3) After paragraph 2(4) (qualifying contracts to which company ceases to be party before commencement day) insert—

(4A) In relation to a subsequent accounting period ending on or after 1 April 2009, the reference in sub-paragraph (4) to Schedule 26 is to be read as a reference to Part 7 of the Corporation Tax Act 2009.

• (4) Omit paragraph 3 (qualifying contracts which become derivative contracts).

• (5) After paragraph 4(7) (contracts which became derivative contracts: chargeable assets) insert—

(7A) In relation to an accounting period ending on or after 1 April 2009, the reference in sub-paragraph (7) to Chapter 2 of Part 4 of the Finance Act 1996 is to be read as a reference to Part 5 of the Corporation Tax Act 2009.

• (6) After paragraph 5(9) (contracts: election to treat as two assets) insert—

(9A) In relation to an accounting period ending on or after 1 April 2009, the reference in sub-paragraph (9) to Chapter 2 of Part 4 of the Finance Act 1996 is to be read as a reference to Part 5 of the Corporation Tax Act 2009.

• (7) After paragraph 6(8) (contracts which become derivative contracts: contracts within Schedule 5AA to ICTA) insert—

(8A) In relation to an accounting period ending on or after 1 April 2009— (a) the reference in sub-paragraph (7) to paragraph 14(3) of Schedule 26 is to be read as a reference to section 574 of the Corporation Tax Act 2009, (b) the reference in that sub-paragraph to Chapter 2 of Part 4 of the Finance Act 1996 is to be read as a reference to Part 5 of the Corporation Tax Act 2009, and (c) the references in sub-paragraph (8) to Schedule 26 are to be read as references to Part 7 of the Corporation Tax Act 2009.

545

Omit Schedule 29 (gains and losses of a company from intangible fixed assets).

Proceeds of Crime Act 2002 (c. 29)

546

The Proceeds of Crime Act 2002 is amended as follows.

547

• (1) Amend Schedule 10 (tax) as follows.

• (2) In paragraph 9—

• (a) in sub-paragraph (1) for “section 84” to “that Act)” substitute “ Part 5 of the Corporation Tax Act 2009 (loan relationships) ”, and

• (b) in sub-paragraph (2) for the words “that Chapter” substitute “ that Part ”.

• (3) In paragraph 11—

• (a) in sub-paragraph (3) for the words from “section 100” to the end substitute “ section 173 of ITTOIA 2005 or section 162 of the Corporation Tax Act 2009 (valuation of trading stock on cessation). ”, and

• (b) in sub-paragraph (4) for the words from “section 100” to the end substitute “ section 174 of ITTOIA 2005 or (as the case may be) section 163 of the Corporation Tax Act 2009. ”

Income Tax (Earnings and Pensions) Act 2003 (c. 1)

548

The Income Tax (Earnings and Pensions) Act 2003 is amended as follows.

549

In section 61(1) (interpretation) in the definition of “business” for “or Schedule A business” substitute “ within the meaning of Chapter 2 of Part 3 of ITTOIA 2005 or Chapter 2 of Part 4 of CTA 2009 ”.

550

In section 178(d) (exception for loans where interest qualifies for tax relief) for “, or a Schedule A business,” substitute “ (within the meaning of Chapter 2 of Part 3 of ITTOIA 2005 or Chapter 2 of Part 4 of CTA 2009) ”.

551

In section 180(5)(d) (threshold for benefit of loan to be treated as earnings) for “, or a Schedule A business,” substitute “ (within the meaning of Chapter 2 of Part 3 of ITTOIA 2005 or Chapter 2 of Part 4 of CTA 2009) ”.

552

• (1) Amend section 357 (business entertainment and gifts: exception where employer's expenses disallowed) as follows.

• (2) In subsection (2) for “section 577 of ICTA” substitute “ section 1298 of CTA 2009 ”.

• (3) In subsection (3) for “that section” substitute “ section 1298 of CTA 2009 ”.

553

In section 420(1)(h) (meaning of securities etc) at the end insert “ or section 507 of CTA 2009 (investment bond arrangements) ”.

554

• (1) Amend section 515 (which refers to other provisions which deal with share incentive plans) as follows.

• (2) Omit subsection (1).

• (3) In subsection (2)—

• (a) omit the “and” immediately after paragraph (c), and

• (b) after paragraph (d) insert

, and (e) Chapter 1 of Part 11 of CTA 2009 (share incentive plans)

.

555

In section 702(5B) (which sets out what shares are corporation tax deductible) for “Schedule 23 to the Finance Act 2003” substitute “ Part 12 of CTA 2009 ”.

556

In Schedule 1 (abbreviations and defined expressions)—

• (a) in Part 1 at the end insert—

CTA 2009	The Corporation Tax Act 2009

, and

• (b) in Part 2 omit the entries for “Schedule A business” and “UK property business”.

557

In Schedule 2 (approved share incentive plans), in paragraph 85(1)(c), for “paragraph 11 of Schedule 4AA to ICTA” substitute “ section 998 of CTA 2009 ”.

Finance Act 2003 (c. 14)

558

The Finance Act 2003 is amended as follows.

559

Omit section 141 (corporation tax for employee share acquisitions).

560

Omit section 143 (restriction of deductions for employee benefit contributions).

561

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

562

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

563

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

564

After section 177(4) (currency contracts and currency options) insert—

(4A) In relation to a subsequent accounting period ending on or after 1 April 2009, the reference in subsection (4)(c) to Schedule 26 is to be read as a reference to Part 7 of the Corporation Tax Act 2009.

565

In section 195(9)(b) (companies acquiring their own shares) for the words from “in accordance with” to the end substitute “ under Chapter 2 of Part 3 of the Corporation Tax Act 2009 ”.

566

Omit Schedule 23 (corporation tax relief for employee share acquisitions).

567

Omit Schedule 24 (restriction of deductions for employee benefit contributions).

568

In paragraph 5A(2) of Schedule 26 (non-resident companies: transactions through broker, investment manager or Lloyd's agent) for “section 11AA of the Taxes Act 1988” substitute “ Chapter 4 of Part 2 of the Corporation Tax Act 2009 ”.

Finance Act 2004 (c. 12)

569

The Finance Act 2004 is amended as follows.

570

In section 71 (collection and recovery of sums to be deducted) omit subsection (3)(b) and the “and” immediately before it.

571

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

572

• (1) Amend section 131 (companies in partnership) as follows.

• (2) In subsection (4) for the words from “annual” to the end substitute

an amount— (“) which is equal to the chargeable amount, and (b) to which the charge to corporation tax on income applies.

• (3) In subsection (10) for “section 91H or 91I of the Finance Act 1996” substitute “ Chapter 8 of Part 6 of the Corporation Tax Act 2009 (returns from partnerships) ”.

573

• (1) Amend section 196 (relief for employers in respect of contributions paid) as follows.

• (2) In subsection (2) for “(trading income) or Case I or II of Schedule D” substitute “ or Part 3 of CTA 2009 (trading income) ”.

• (3) In subsection (3) for “section 75 of ICTA” substitute “ Chapter 2 of Part 16 of CTA 2009 ”.

574

In section 196A(4) (power to restrict relief)—

• (a) in paragraph (a) for “(trading income) or Case I or II of Schedule D” substitute “ or Part 3 of CTA 2009 (trading income) ”, and

• (b) in paragraph (b) for “section 75 of ICTA” substitute “ section 1219 of CTA 2009 ”.

575

In section 197(10) (spreading of relief)—

• (a) in paragraph (a), for “(trading income) or Case I or II of Schedule D,” substitute “ or Part 3 of CTA 2009 (trading income), ” and

• (b) in paragraph (b) for the words from “section 75” to the end substitute “ section 76 of ICTA (expenses of insurance companies) or Chapter 2 of Part 16 of CTA 2009 (expenses of management: companies with investment business), an accounting period. ”

576

In section 199A(10) (indirect contributions)—

• (a) in paragraph (a) for “(trading income) or Case I or II of Schedule D” substitute “ or Part 3 of CTA 2009 (trading income) ”, and

• (b) in paragraph (b) for “section 75 of ICTA” substitute “ Chapter 2 of Part 16 of CTA 2009 ”.

577

In section 200 (no other relief for employers in respect of contributions)—

• (a) in paragraph (a) for “(trading income) or Case I or II of Schedule D” substitute “ or Part 3 of CTA 2009 (trading income) ”, and

• (b) in paragraph (b) for “section 75 of ICTA” substitute “ Chapter 2 of Part 16 of CTA 2009 ”.

578

• (1) Amend section 246 (restriction of deduction for non-contributory provision) as follows.

• (2) In subsection (2)—

• (a) in paragraph (a) for “(trading income) or Case I or II of Schedule D” substitute “ or Part 3 of CTA 2009 (trading income) ”, and

• (b) in paragraph (b) for “section 75 of ICTA” substitute “ Chapter 2 of Part 16 of CTA 2009 ”.

• (3) In subsection (3)—

• (a) in paragraph (a) for “(trading income) or Case I or II of Schedule D,” substitute “ or Part 3 of CTA 2009 (trading income), ” and

• (b) in paragraph (b) for “of section 75 or 76 of ICTA in relation to the employer,” substitute “ in relation to the employer of section 76 of ICTA or Chapter 2 of Part 16 of CTA 2009, ”.

579

In section 246A(4) (case where no relief for provision by an employer)—

• (a) in paragraph (a) for “(trading income) or Case I or II of Schedule D” substitute “ or Part 3 of CTA 2009 (trading income) ”, and

• (b) in paragraph (b) for “section 75 of ICTA” substitute “ Chapter 2 of Part 16 of CTA 2009 ”.

580

In section 280(1) (abbreviations and general index)—

• (a) omit the “and” immediately after the entry for “ITTOIA 2005”, and

• (b) after the entry for “ITA 2007” insert

, and “CTA 2009” means the Corporation Tax Act 2009.

581

• (1) Amend Schedule 26 (offshore funds) as follows.

• (2) In paragraph 1(6) for “Chapter 2 of Part 4 of the Finance Act 1996” substitute “ Part 5 of the Corporation Tax Act 2009 ”.

• (3) In paragraph 2(6) in the definition of “derivative contract” for “Schedule 26 to the Finance Act 2002” substitute “ Part 7 of the Corporation Tax Act 2009 ”.

Energy Act 2004 (c. 20)

582

The Energy Act 2004 is amended as follows.

583

• (1) Amend section 27 (tax exemption for NDA activities) as follows.

• (2) In subsection (8)—

• (a) in the definition of “trading income”—

• (i) in paragraph (a), after “trade” insert “ carried on wholly or partly in the United Kingdom ”, and

• (ii) in paragraph (b) for “Case I of Schedule D” substitute “ Chapter 2 of Part 3 of the Corporation Tax Act 2009 ”, and

• (b) in the definition of “trading losses”—

• (i) after “trade” insert “ carried on wholly or partly in the United Kingdom ”, and

• (ii) for “Case I of Schedule D” substitute “ Chapter 2 of Part 3 of the Corporation Tax Act 2009 ”.

• (3) In subsection (9)—

• (a) in paragraph (a) for “Chapter 2 of Part 4 of the Finance Act 1996 (c. 8)” substitute “ Part 5 of the Corporation Tax Act 2009 ”, and

• (b) in paragraph (b) for “under Schedule 26 to the Finance Act 2002 (c. 23) (derivative contracts)” substitute “ in accordance with Part 7 of the Corporation Tax Act 2009 (derivative contracts) ”.

584

• (1) Amend section 28 (taxation of activities of the Nuclear Decommissioning Authority chargeable under Case VI of Schedule D) as follows.

• (2) In subsection (1)—

• (a) in paragraph (a) for “under Case VI of Schedule D” substitute “ under or by virtue of any provision to which section 834A of the Income and Corporation Taxes Act 1988 (miscellaneous charges) applies ”, and

• (b) in the words after paragraph (b) for “Case I of Schedule D” substitute “ Chapter 2 of Part 3 of the Corporation Tax Act 2009 ”.

• (3) In subsection (2)(b) for the words from “under” to the end substitute “ under or by virtue of a provision to which section 834A of the Income and Corporation Taxes Act 1988 applies, other than section 979 of the Corporation Tax Act 2009 (income not otherwise charged). ”

• (4) In the title for “Case VI of Schedule D” substitute “ miscellaneous provisions ”.

585

In section 44(2) (extinguishment of BNFL losses for tax purposes)—

• (a) in paragraph (b) for “under Case VI of Schedule D” substitute “ under or by virtue of any provision to which section 834A of the Income and Corporation Taxes Act 1988 (miscellaneous charges) applies ”,

• (b) in paragraph (c) for “section 75(9) of the Income and Corporation Taxes Act 1988” substitute “ section 1223 of the Corporation Tax Act 2009 (carrying forward expenses of management and other amounts) ”,

• (c) in paragraph (d) for “Schedule A losses” and “that Act” substitute “ UK property business losses ” and “ the Income and Corporation Taxes Act 1988 ” respectively, and

• (d) in paragraph (h) for “subsection (1) of section 83 of the Finance Act 1996 (c. 8)” and “subsection (3A) of that section” substitute “ section 456(1) of the Corporation Tax Act 2009 ” and “ section 457(1) of that Act ” respectively.

586

• (1) Amend Schedule 9 (taxation provisions relating to nuclear transfer schemes) as follows.

• (2) In paragraph 11—

• (a) in sub-paragraph (2) for “Chapter 2 of Part 4 of the Finance Act 1996 (c. 8)” substitute “ Part 5 of the Corporation Tax Act 2009 ”, and

• (b) in sub-paragraph (3) for “Chapter 2 of Part 4 of the Finance Act 1996” and “that Chapter” substitute “ Part 5 of the Corporation Tax Act 2009 ” and “ that Part ” respectively.

• (3) In paragraph 12—

• (a) in sub-paragraph (2) for “Schedule 26 to the Finance Act 2002 (c. 23)” substitute “ Part 7 of the Corporation Tax Act 2009 ”, and

• (b) in sub-paragraph (3)—

• (i) for “Schedule 26 to the Finance Act 2002” substitute “ Part 7 of the Corporation Tax Act 2009 ”, and

• (ii) for “that Schedule” substitute “ that Part ”.

• (4) In paragraph 15(4), in the definition of “relevant trading profits and losses” for the words from “under” to the end substitute “ under Part 3 of the Corporation Tax Act 2009 in respect of the trade or part of a trade in question for periods in which the trade was carried on wholly or partly in the United Kingdom. ”

• (5) In paragraph 23—

• (a) in sub-paragraph (2) for “Chapter 2 of Part 4 of the Finance Act 1996 (c. 8)” substitute “ Part 5 of the Corporation Tax Act 2009 ”, and

• (b) in sub-paragraph (3) for “Chapter 2 of Part 4 of the Finance Act 1996 (c. 8)” and “that Chapter” substitute “ Part 5 of the Corporation Tax Act 2009 ” and “ that Part ” respectively.

• (6) In paragraph 24(2) for “Schedule 26 to the Finance Act 2002 (c. 23)” substitute “ Part 7 of the Corporation Tax Act 2009 ”.

• (7) In paragraph 24(3)—

• (a) for “Schedule 26 to the Finance Act 2002” substitute “ Part 7 of the Corporation Tax Act 2009 ”, and

• (b) for “that Schedule” substitute “ that Part ”.

• (8) In paragraph 27(4), in the definition of “relevant trading profits and losses” for the words from “under” to the end substitute “ under Part 3 of the Corporation Tax Act 2009 in respect of the trade or part of a trade in question for periods in which the trade was carried on wholly or partly in the United Kingdom. ”

• (9) In paragraph 33—

• (a) in paragraph (a) for “Chapter 2 of Part 4 of the Finance Act 1996 (c. 8)” substitute “ Part 5 of the Corporation Tax Act 2009 ”, and

• (b) in paragraph (b) for “Schedule 26 to the Finance Act 2002 (c. 23)” substitute “ Part 7 of the Corporation Tax Act 2009 ”.

Income Tax (Trading and Other Income) Act 2005 (c. 5)

587

The Income Tax (Trading and Other Income) Act 2005 is amended as follows.

588

In section 22(2)(b) (payments for wayleaves) for “would otherwise be brought into account in calculating the profits” substitute “ incurred by the trader in respect of the wayleave would otherwise be brought into account in calculating profits ”.

589

• (1) Amend section 48 (car or motor cycle hire) as follows.

• (2) In subsection (3) for “the deduction is reduced as a result of subsection (2)” substitute “ a deduction is reduced as a result of subsection (2), or a corresponding provision, ”.

• (3) In subsection (4)(a) omit “under section 97 (debts incurred and later released)”.

• (4) After subsection (4) insert—

(4A) In this section “corresponding provision” means— (a) section 56(2) of CTA 2009 (car or motor cycle hire: trade profits and property income), (b) section 1251(2) of CTA 2009 (car or motor cycle hire: expenses of management), or (c) section 76ZN(2) of ICTA (car or motor cycle hire: expenses of insurance companies).

590

In section 49(2)(b) (car or motor cycle hire: supplementary) after “the car” insert “ or motor cycle ”.

591

In section 60(6) (tenants under taxed leases: introduction) after “288” insert “ below or section 228 of CTA 2009 ”.

592

• (1) Amend section 64 (restriction on section 61 expenses: lease premium receipts) as follows.

• (2) For subsection (1) substitute—

(1) This section applies if a lease has been granted out of the taxed lease and— (a) in calculating the amount of a receipt of a property business under Chapter 4 of Part 3 (profits of property businesses: lease premiums etc) in respect of the lease, there is a reduction under section 288 (the additional calculation rule) by reference to the taxed receipt, or (b) in calculating the amount of a receipt of a property business under Chapter 4 of Part 4 of CTA 2009 (profits of a property business: lease premiums etc) in respect of the lease, there is a reduction under section 228 of that Act (the additional calculation rule) by reference to the taxed receipt. In this section and sections 65 and 67 the receipt that is so reduced is referred to as a “lease premium receipt”.

• (3) In subsection (6) after “288” insert “ below or section 228 of CTA 2009 ”.

593

In section 65(1)(a) (restrictions on section 61 expenses: lease of part of premises) for “the conditions in section 64(1)(a) and (b) are met” substitute “ section 64 applies ”.

594

In the title of section 66 (corporation tax receipts treated as taxed receipts) after “tax receipts” insert “ under ICTA ”.

595

• (1) Amend section 67 (restrictions on section 61 expenses: corporation tax receipts) as follows.

• (2) In subsection (3)(a), after “2005” insert “ but before 1st April 2009 ”.

• (3) In the title after “receipts” insert “ under ICTA ”.

596

• (1) Amend section 71 (educational establishments) as follows.

• (2) In subsection (3)—

• (a) in paragraph (a) for “education or library board” substitute “ education and library board ”, and

• (b) in paragraph (b) for “or a controlled, maintained, grant-maintained integrated, controlled integrated, voluntary or” substitute “ , a grant-aided school or an ”.

597

Omit section 79(2) (additional payments: change in persons carrying on the trade).

598

After section 79 insert—

(79A) (1) This section deals with the application of section 79 in circumstances where there is a change in the persons carrying on the trade. (2) The employer is treated for the purposes of section 79 as permanently ceasing to carry on the trade unless a person carrying on the trade immediately before the change continues to carry it on after the change.

599

In section 80(2) (payments made by the Government) for “79” substitute “ 79A ”.

600

In section 88(6)(b) (payments to research associations, universities etc) before “what” insert “ to ”.

601

• (1) Amend section 155 (levies and repayments under FISMA 2000) as follows.

• (2) In subsection (1) omit the words from “carried” to the end.

• (3) For subsection (2) substitute—

(2) A deduction is allowed for any sum— (a) spent by the person carrying on the trade in paying a levy, or (b) paid by that person as a result of an award of costs under costs rules, so far as it is not otherwise allowable.

• (4) In subsection (3) after “person” insert “ carrying on the trade ”.

• (5) After subsection (3) insert—

(3A) For the purposes of this section “costs rules” means— (a) rules made under section 230 of FISMA 2000, or (b) provision relating to costs contained in standard terms fixed under paragraph 18 of Schedule 17 to FISMA 2000.

• (6) In subsection (4)(e) for the words from “(other” to the end substitute “ (other than a sum paid as a result of an award of costs under costs rules) ”.

602

In section 158(1)(d) (lease premiums etc: reduction of receipts) for “term” substitute “ terms ”.

603

In section 170(3)(b) (deduction for capital expenditure) for “section 91(1)(b) of ICTA” substitute “ section 147(2)(b) of CTA 2009 ” and for “section 91(1)(a) of ICTA substitute “ section 147(2)(a) of CTA 2009 ”.

604

In section 171(2)(d) (allocation of ancillary capital expenditure) for “section 91(1)(b) of ICTA,” substitute “ section 147(2)(b) of CTA 2009 ”.

605

In section 175(2) (basis of valuation of trading stock)—

• (a) in paragraph (a) after “trade” insert “ , profession or vocation ”, and

• (b) in paragraph (b) after “trade” insert “ , profession or vocation ”.

606

In section 176(1)(a) (sale basis of valuation: sale to unconnected person) after “trade”, in both places where it occurs, insert “ , profession or vocation ”.

607

In section 177(1)(a) (sale basis of valuation: sale to connected person) after “trade”, in both places where it occurs, insert “ , profession or vocation ”.

608

In section 178(1)(a) (sale basis of valuation: election by connected persons) after “trade”, in both places where it occurs, insert “ , profession or vocation ”.

609

• (1) Amend section 180 (cost to buyer of stock valued on sale basis of valuation) as follows.

• (2) In subsection (1) after “trade” insert “ , profession or vocation ”.

• (3) In subsection (2)(b) for “section 100(1A) to (1C) of ICTA” substitute “ section 164(3) or sections 165 to 167 of CTA 2009 ”.

610

In section 184(1) (basis of valuation of work in progress)—

• (a) in paragraph (a) after “a” insert “ trade, ” and

• (b) in paragraph (b) after “that” insert “ trade, ”.

611

In section 194(7) (disposal of know-how as part of disposal of all or part of trade)—

• (a) in paragraph (a) for “subsection (3) of section 531 of ICTA” substitute “ section 178 of CTA 2009 ”, and

• (b) for “that subsection”, in both places where it occurs, substitute “ that section ”.

612

In section 246(2) (basic meaning of “post-cessation receipt”) for the words from “the occurrence” to the end substitute “ a reference to a company ceasing to be within the charge to corporation tax in respect of a trade. ”

613

In section 249(3) (debts released after cessation) for the words from “the occurrence” to the end substitute “ a reference to a company ceasing to be within the charge to corporation tax in respect of a trade. ”

614

In section 276(3) (introduction to Chapter 4 of Part 3) for “term” substitute “ terms ”.

615

In section 279(3) for “or of” substitute “ of or ”.

616

In the title of section 281 (sums payable for variation or waiver of term of lease) for “term” substitute “ terms ”.

617

• (1) Amend section 287 (circumstances in which additional calculation rule applies) as follows.

• (2) In subsection (1) for “term” substitute “ terms ”.

• (3) In subsection (4)—

• (a) omit the “or” immediately before paragraph (b),

• (b) in paragraph (b) for “additional calculation rule” substitute “ rule in section 288 (the additional calculation rule) ”,

• (c) after paragraph (b) insert—

(c) there is a receipt under any of sections 217 to 222 of CTA 2009 (receipts in respect of lease premiums, sums payable instead of rent, for surrender of lease and for variation or waiver of terms of lease and assignments) in respect of the lease, or (d) there would be such a receipt, but for the operation of the rule in section 228 of that Act (the additional calculation rule) in the calculation of its amount.

, and

• (d) in the second sentence for “such a receipt” substitute “ a receipt falling within paragraph (a), (b), (c) or (d) ”.

618

• (1) Amend section 288 (the additional calculation rule) as follows.

• (2) In subsection (4)—

• (a) for “282,” substitute “ 282 above, or in section 217, 219, 220, 221 or 222 of CTA 2009, ”, and

• (b) after “section 290(2) to (4)” insert “ above ”.

• (3) In subsection (6)—

• (a) omit the “and” immediately before paragraph (d), and

• (b) after paragraph (d) insert

, and (e) in the case of a receipt under Chapter 4 of Part 4 of CTA 2009 (profits of property businesses: lease premiums etc), its receipt period within the meaning of that Chapter (see section 228(6) of that Act).

619

• (1) Amend section 290 (meaning of “unused amount” and “unreduced amount”) as follows.

• (2) In subsection (2) for the words from “formula” to the end substitute

formula in— (a) section 277, 279, 280, 281 or 282 above, or (b) section 217, 219, 220, 221 or 222 of CTA 2009 (corporation tax provisions corresponding to those listed in paragraph (a)).

• (3) For subsection (3) substitute—

(3) Subsection (4) applies— (a) to a taxed receipt under section 277 (lease premiums) as a result of section 278 (amount treated as lease premium where work required), and (b) to a taxed receipt under section 217 of CTA 2009 (lease premiums) as a result of section 218 of that Act (amount treated as lease premium where work required).

• (4) In subsection (5)—

• (a) in paragraph (a) after “288” insert “ above or section 228 of CTA 2009 (the additional calculation rule) ”,

• (b) in paragraph (b) after “61” insert “ above or section 63 of CTA 2009 ”, and

• (c) in paragraph (c) after “292” insert “ below or section 232 of CTA 2009 ”.

• (5) In subsection (6)—

• (a) after “288” insert “ above or section 228 of CTA 2009 ”, and

• (b) for “that section” substitute “ the section concerned ”.

620

• (1) Amend section 293 (restrictions on section 292 expenses: the additional calculation rule) as follows.

• (2) For subsection (1) substitute—

(1) This section applies if— (a) in calculating the amount of a receipt under this Chapter there is a reduction under section 288 (the additional calculation rule) by reference to a taxed receipt, or (b) in calculating the amount of a receipt under Chapter 4 of Part 4 of CTA 2009 (profits of a property business: lease premiums etc) there is a reduction under section 228 of that Act (the additional calculation rule) by reference to a taxed receipt. The receipt that is so reduced is referred to in this section as the “lease premium receipt”.

• (3) In subsection (6) after “288” insert “ above or section 228 of CTA 2009 ”.

621

For section 294(1)(c) (restriction on section 292 expenses: lease of part of premises) substitute—

(c) the condition in subsection (1A) is met. (1A) The condition is that— (a) in calculating the amount of a receipt under any of sections 277 to 281 (receipts in respect of lease premiums or sums payable instead of rent, for surrender of lease or for variation or waiver of terms of lease) in respect of the lease, there is a reduction under section 288 by reference to a taxed receipt, or (b) in calculating the amount of a receipt under any of sections 217 to 221 of CTA 2009 (receipts in respect of lease premiums or sums payable instead of rent, for surrender of lease or for variation or waiver of terms of lease) in respect of the lease, there is a reduction under section 228 of that Act (the additional calculation rule) by reference to a taxed receipt. The receipt that is so reduced is referred to in this section as the “lease premium receipt”.

622

For section 295(2)(b) (limit on reductions and deductions) substitute—

(b) the total of the amounts mentioned in subsection (3). (3) Those amounts are— (a) the reductions under section 228 of CTA 2009 (the additional calculation rule) by reference to the taxed receipt, (b) the deductions allowed in calculating the profits of a property business for expenses under section 232 of CTA 2009 (tenant under taxed lease which uses premises for purposes of property business treated as incurring expenses) by reference to the taxed receipt, and (c) the deductions allowed in calculating the profits of a trade, profession or vocation for expenses under section 61 above or section 63 of CTA 2009 (tenant under taxed lease who uses land in connection with trade treated as incurring expenses) by reference to the taxed receipt.

623

In section 296(1)(a) (corporation tax receipts treated as taxed receipts) after “2005” insert “ but before 1st April 2009 ”.

624

In section 298 (taking account of deductions for rent as a result of section 37(4) or 87(2) of ICTA)—

• (a) in subsections (1)(a) and (3)(a) after “2005” insert “ but before 1st April 2009 ”, and

• (b) in subsection (2) for “295(2)(b)” substitute “ 295(3)(c) ”.

625

In section 299(1)(b) (payment of tax by instalments) for “term” substitute “ terms ”.

626

• (1) Amend section 303 (rules for determining effective duration of lease) as follows.

• (2) For Rule 1 substitute—

Rule 1: If— (a) the terms of the lease or any other circumstances make it unlikely that the lease will continue beyond a date before the end of the term for which the lease was granted, and (b) the premium was not substantially greater than it would have been had the term been one ending on that date, the lease is treated as ending on that date (or the earliest such date).

• (3) After subsection (2) insert—

(2A) In Rule 1 “premium” includes— (a) an amount treated as a premium under section 278 (amount treated as lease premium where work required), (b) a sum payable by the tenant under the terms subject to which the lease is granted instead of the whole or a part of the rent for a period, (c) a sum payable by the tenant under the terms subject to which the lease is granted as consideration for the surrender of the lease, and (d) a sum payable by the tenant (otherwise than by way of rent) as consideration for the variation or waiver of a term of the lease.

627

• (1) Amend section 304 (applying the rules in section 303) as follows.

• (2) In subsection (1)(b) for “term” substitute “ terms ”.

• (3) In subsection (4) for the words from “securing” to the end substitute

securing— (a) an income tax advantage in the application of this Chapter, or (b) a corporation tax advantage in the application of Chapter 4 of Part 4 of CTA 2009 (profits of property business: lease premiums etc).

• (4) In subsection (5) after “applying” insert “ paragraph (b) of ”.

628

In section 318(4) for “section 30 of ICTA” substitute “ sections 255 to 257 of CTA 2009 ”.

629

• (1) Amend section 356 (application to Schedule A businesses) as follows.

• (2) In subsection (1) for “a Schedule A business” substitute “ one within the charge to corporation tax ”.

• (3) In subsection (2) for the words from “includes” to the end substitute “ includes, in the case of a company, the occurrence of an event treated under section 289 of CTA 2009 (company starting or ceasing to be within the charge to corporation tax) as the company permanently ceasing to carry on the business. ”

• (4) In subsection (3) for “Schedule A business” substitute “ UK property business ”.

• (5) In the title for “Schedule A businesses” substitute “ businesses within the charge to corporation tax ”.

630

In section 413(4) (person liable) for paragraph (b) substitute—

(b) section 947 of CTA 2009 (under which similar provision is made for the purposes of Chapter 3 of Part 10 of that Act)

.

631

In section 419(2) (loans and advances to persons who die) for paragraph (b) substitute—

(b) section 947 of CTA 2009” (under which similar provision is made for the purposes of Chapter 3 of Part 10 of that Act)

.

632

In section 466(3) (person liable: personal representatives) for “section 701(8) of ICTA” and “Part 16 of ICTA” substitute “ section 947 of CTA 2009 ” and “ Chapter 3 of Part 10 of CTA 2009 ” respectively.

633

In section 496(7) (modification of section 494: qualifying endowment policies held as security for company debts) in the definition of “accounting period” for “section 12 of ICTA” substitute “ Chapter 2 of Part 2 of CTA 2009 ”.

634

In section 671 (successive absolute interests)—

• (a) at the end of subsection (4) add “ (or, where the previous holder is a company chargeable to corporation tax, having regard to the application of section 954(4) of CTA 2009 to the previous holder) ”, and

• (b) at the end of subsection (6) add “ (but, in a case where the last previous holder or any earlier previous holder is a company chargeable to corporation tax, having regard to the application of section 954(6) of CTA 2009 to the previous holder) ”.

635

After section 749 insert—

(749A) No liability to income tax arises in respect of interest paid under section 826 of ICTA (interest on tax overpaid).

636

In section 754(1) (redemption of funding bonds) for “section 582(1) of ICTA” substitute “ section 413 of CTA 2009 ”.

637

• (1) Amend section 839 (annual payments payable out of relevant foreign income) as follows.

• (2) In subsection (1) for “A to C” substitute “ A, B1 or B2 and C ”.

• (3) In subsection (3)—

• (a) for “B” substitute “ B1 ”, and

• (b) omit “or to corporation tax under Case III of Schedule D”.

• (4) After subsection (3) insert—

(3A) Condition B2 is that, had the payment arisen in the United Kingdom it would have been— (a) required to be brought into account under Part 5 of CTA 2009 (loan relationships) as a non-trading credit, or (b) chargeable to corporation tax under Chapter 5 of Part 10 of that Act (distributions from unauthorised unit trusts) or Chapter 7 of that Part (annual payments not otherwise charged).

638

In section 847(2) (partnerships: general provisions), in the words before paragraph (a) for the words from “are expressed” to “also apply” substitute “ which are expressed to apply to trades also apply, unless otherwise indicated (whether expressly or by implication) ”.

639

In section 849 (calculation of firm's profits or losses) after subsection (3) insert—

(4) In calculating under subsection (2) or (3) the profits of a trade for any period of account no account is taken of any losses for another period of account.

640

For section 850 (allocation of firm's profits or losses between partners) substitute—

(850) (1) For any period of account a partner's share of a profit or loss of a trade carried on by a firm is determined for income tax purposes in accordance with the firm's profit-sharing arrangements during that period. This is subject to sections 850A and 850B. (2) In this section and sections 850A and 850B “profit-sharing arrangements” means the rights of the partners to share in the profits of the trade and the liabilities of the partners to share in the losses of the trade. (850A) (1) For any period of account, if— (a) the calculation under section 849 in relation to a partner (“A”) produces a profit, and (b) A's share determined under section 850 is a loss, A's share of the profit of the trade is neither a profit nor a loss. (2) For any period of account, if— (a) the calculation under section 849 in relation to A produces a profit, (b) A's share determined under section 850 is a profit, and (c) the comparable amount for at least one other partner is a loss, A's share of the profit of the trade is the amount produced by the formula in subsection (3). (3) The formula is— $$FP×PPPP+TCP$where—FP is the amount of the firm's profit calculated under section 849 in relation to A,PP is the amount determined under section 850 to be A's profit, andTCP is the total of the comparable amounts attributed to other partners under step 3 in subsection (4) that are profits.$ (4) The comparable amount for each partner other than A is determined as follows. Step 1 Take the firm's profit calculated under section 849 in relation to A. Step 2 Determine in accordance with the firm's profit-sharing arrangements during the relevant period of account the shares of that profit that are attributable to each of the other partners. Step 3 Each such share is the comparable amount for the partner to whom it is attributed. (5) In subsections (2) to (4) “partner” means any partner in the firm, whether or not chargeable to income tax. (850B) (1) For any period of account, if— (a) the calculation under section 849 in relation to a partner (“A”) produces a loss, and (b) A's share determined under section 850 is a profit, A's share of the loss of the trade is neither a profit nor a loss. (2) For any period of account, if— (a) the calculation under section 849 in relation to A produces a loss, (b) A's share determined under section 850 is a loss, and (c) the comparable amount for at least one other partner is a profit, A's share of the loss of the trade is the amount produced by the formula in subsection (3). (3) The formula is— $$FL×PLPL+TCL$where—FL is the amount of the firm's loss calculated under section 849 in relation to A,PL is the amount determined under section 850 to be A's loss, andTCL is the total of the comparable amounts attributed to other partners under step 3 in subsection (4) that are losses.$ (4) The comparable amount for each partner other than A is determined as follows. Step 1 Take the firm's loss calculated under section 849 in relation to A. Step 2 Determine in accordance with the firm's profit-sharing arrangements during the relevant period of account the shares of that loss that are attributable to each of the other partners. Step 3 Each such share is the comparable amount for the partner to whom it is attributed. (5) In subsections (2) to (4) “partner” means any partner in the firm, whether or not chargeable to income tax.

641

• (1) Amend section 860 (adjustment income) as follows.

• (2) After subsection (1) insert—

(1A) A change in the persons carrying on a property business from one period of account to the next does not prevent Chapter 7 of Part 3 (adjustment income) applying in relation to the property business so long as a person carrying on the property business immediately before the change continues to carry on the property business immediately after the change.

• (3) In subsection (3)—

• (a) after “trade” insert “ or property business ”, and

• (b) after “Chapter 17 of Part 2” insert “ , or Chapter 7 of Part 3, ”.

• (4) In subsection (6)—

• (a) in paragraph (a), at the end insert “ or Chapter 7 of Part 3 (as the case requires) ”, and

• (b) in paragraph (b) after “trade” insert “ or property business (as the case requires) ”.

642

For section 861 (sale of patent rights: effect of partnership changes) substitute—