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In force since 2026-04-01, as the publisher states.
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Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.
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Corporation Tax Act 2009 2009 c. 4 An Act to restate, with minor changes, certain enactments relating to corporation tax; and for connected purposes. [26th March 2009] Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Propose a change(1) The main Acts relating to corporation tax are— (a) this Act (which covers the ground described in section 1), (b) CTA 2010 (which covers the ground described in section 1 of that Act), and (c) TCGA 1992 (so far as relating to chargeable gains accruing to a company in respect of which the company is chargeable to corporation tax). (2) Enactments relating to corporation tax are also contained in other Acts: see in particular— (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Schedule 18 to FA 1998 (company tax returns, assessments and related matters), (d) Schedule 22 to FA 2000 (tonnage tax), (e) CAA 2001 (allowances for capital expenditure), (f) Part 2 of TIOPA 2010 (double taxation relief), (g) Parts 4 and 5 of that Act (transfer pricing and advance pricing agreements), (ga) Part 4A of that Act (assessment of unassessed transfer pricing profits), (h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ha) Part 6A of that Act (hybrid and other mismatches), (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (j) Part 8 of that Act (offshore funds), (ja) Part 9A of that Act (controlled foreign companies), (jb) Part 10 of that Act (corporate interest restriction), (k) Part 2 of FA 2012 (insurance companies carrying on long-term business), and (l) Part 3 of that Act (friendly societies carrying on long-term business). (3) Schedule 1 to the Interpretation Act 1978 defines “the Corporation Tax Acts” as the enactments relating to the taxation of the income and chargeable gains of companies and of company distributions (including provisions relating to income tax).
Propose a change(1) Part 2 of this Act contains basic provisions about the charge to corporation tax including— (a) the imposition of the charge to corporation tax on the income and chargeable gains of companies (referred to collectively as “profits”), (see section 2), (b) the exclusion of income and chargeable gains subject to corporation tax from income tax and capital gains tax (see sections 3 and 4), (c) provision about the territorial scope of the charge to corporation tax (see section 5 and Chapters 3A and 4), (d) provision about how corporation tax is charged and assessed, in particular its charging and assessment by reference to accounting periods (see section 8), (e) provision about accounting periods (see Chapter 2), and (f) rules for determining the residence of companies (see Chapter 3). (2) Under section 2(4) the charge to corporation tax on income has effect in accordance with the provisions of the Corporation Tax Acts that deal with its application, the main provisions of this Act that do so being— (a) Part 3 (trading income), (b) Part 4 (property income), (c) Parts 5 and 6 (profits arising from loan relationships), (d) Part 7 (profits arising from derivative contracts), (e) Part 8 (gains in respect of intangible fixed assets), (f) Part 9 (profits arising from disposals of know-how and sales of patent rights), (fa) Part 9A (company distributions), and (g) Part 10 (miscellaneous income). (3) Part 7 also applies the charge to corporation tax on chargeable gains to certain profits arising from derivative contracts. (4) Parts 5 to 8 also deal with how deficits or losses arising from, or in respect of, the matters to which they relate are brought into account for corporation tax purposes. (5) The following Parts provide relief for particular types of expenditure— (a) Part 11 (relief for particular employee share acquisition schemes), (b) Part 12 (other relief for employee share acquisitions), (c) Part 13 (additional relief for expenditure on research and development), (d) Part 14 (remediation of contaminated land), and (e) Part 15 (film production). (6) The following Parts contain special rules for particular cases— (a) Part 15 (film production), (b) Part 16 (companies with investment business), (c) Part 17 (partnerships), and (d) Part 18 (unremittable income). (7) The following Parts contain provisions of general application— (a) Part 19 (general exemptions), (b) Part 20 (general calculation rules), and (c) Part 21 (other general provisions, including definitions for the purposes of the Act). (8) For abbreviations and defined expressions used in this Act, see section 1312 and Schedule 4.
Propose a change(1) Corporation tax is charged on profits of companies for any financial year for which an Act so provides. (2) In this Part “profits” means income and chargeable gains, except in so far as the context otherwise requires. (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) In this Act “the charge to corporation tax on income” means the charge under subsection (1) so far as relating to income. (4) The charge to corporation tax on income has effect in accordance with the provisions of the Corporation Tax Acts that deal with its application.
Propose a change(1) The provisions of the Income Tax Acts relating to the charge to income tax do not apply to income of a company if— (a) the company is UK resident, or (b) the company is not UK resident and it is chargeable to corporation tax in respect of the income, or would be so chargeable but is not as a result of— (i) an exemption, or (ii) the application of sections 1142 to 1144 of CTA 2010 (circumstances in which a company is not regarded as having a permanent establishment). (2) Subsection (1) does not apply to income accruing to a company in a fiduciary or representative capacity.
Propose a changeCapital gains tax is not charged on gains accruing to a company in respect of which the company is chargeable to corporation tax, or would be so chargeable but for an exemption.
Propose a change(1) A UK resident company is chargeable to corporation tax on income on all its profits wherever arising (but see Chapter 3A for an exemption from charge in respect of profits of foreign permanent establishments). (2) A non-UK resident company is within the charge to corporation tax on income only if— (a) it carries on a trade of dealing in or developing UK land (see section 5B), ... (b) it carries on a trade in the United Kingdom (other than a trade of dealing in or developing UK land) through a permanent establishment in the United Kingdom, (c) it carries on a UK property business, or (d) it has other UK property income. (2A) A non-UK resident company which carries on a trade of dealing in or developing UK land is chargeable to corporation tax on income on all its profits wherever arising that are profits of that trade. (3) A non-UK resident company which carries on a trade in the United Kingdom through a permanent establishment in the United Kingdom is chargeable to corporation tax on income on all its profits wherever arising that are chargeable profits as defined in section 19 (profits attributable to its permanent establishment in the United Kingdom). (3A) A non-UK resident company which carries on a UK property business is chargeable to corporation tax on income on all its profits that are— (a) profits of that business, or (b) profits arising from loan relationships or derivative contracts that the company is a party to for the purposes of that business. (3B) A non-UK resident company which has other UK property income is chargeable to corporation tax on income on all its profits that— (a) consist of that income, or (b) are profits arising from loan relationships or derivative contracts that the company is a party to for the purposes of enabling it to generate that income. (4) Subsections (1) and (2A) to (3B) are subject to any exceptions provided for by the Corporation Tax Acts. (5) The territorial scope of the charge to corporation tax on chargeable gains is given by section 2B of TCGA 1992. (6) In this Part “other UK property income” means income dealt with by any of the following Chapters of Part 4— (a) Chapter 7 (rent receivable in connection with a UK section 39(4) concern); (b) Chapter 8 (rent receivable for UK electric-line wayleaves); (c) Chapter 9 (post-cessation receipts arising from a UK property business).
Propose a change(1) Subsection (3) applies if a company has entered into an arrangement the main purpose or one of the main purposes of which is to obtain a relevant tax advantage for the company. (2) In subsection (1) the reference to obtaining a relevant tax advantage includes obtaining a relevant tax advantage by virtue of any provisions of double taxation arrangements, but only in a case where the relevant tax advantage is contrary to the object and purpose of the provisions of the double taxation arrangements (and subsection (3) has effect accordingly, regardless of section 6(1) of TIOPA 2010). (3) The relevant tax advantage is to be counteracted by means of adjustments. (4) For this purpose adjustments may be made (whether by an officer of Revenue and Customs or by the company) by way of an assessment, the modification of an assessment, amendment or disallowance of a claim, or otherwise. (5) In this section “relevant tax advantage” means a tax advantage in relation to corporation tax to which the company is chargeable (or would without the tax advantage be chargeable) by virtue of section 5(2A). (6) In this section— “arrangement” (except in the phrase “double taxation arrangements”) includes any agreement, understanding, scheme, transaction or series of transactions, whether or not legally enforceable; “double taxation arrangements” means arrangements which have effect under section 2(1) of TIOPA 2010 (double taxation relief by agreement with territories outside the United Kingdom); “tax advantage” has the meaning given by section 1139 of CTA 2010.
Propose a change(1) A non-UK resident company's “trade of dealing in or developing UK land” consists of — (a) any activities falling within subsection (2) which it carries on, and (b) any activities from which profits, gains or losses arise which are treated under Part 8ZB of CTA 2010 as profits or losses of the company's trade of dealing in or developing UK land. (2) The activities within this subsection are— (a) dealing in UK land; (b) developing UK land for the purpose of disposing of it. (3) In this section “land” includes— (a) buildings and structures, (b) any estate, interest or right in or over land, and (c) land under the sea or otherwise covered by water. (4) In this section— “disposal” is to be interpreted in accordance with section 356OQ of CTA 2010; “UK land” means land in the United Kingdom.
Propose a change(1) A company is not chargeable to corporation tax on profits which accrue to it in a fiduciary or representative capacity except as respects its own beneficial interest (if any) in the profits. (2) The exception under subsection (1) from chargeability does not apply to profits arising in the winding up of the company.
Propose a changeProfits that accrue for the benefit of a company under a trust are treated for the purposes of the charge to corporation tax under section 2(1) as accruing directly to the company.
Propose a change(1) Corporation tax for a financial year is charged on profits arising in the year. (2) Corporation tax is calculated and chargeable, and assessments to corporation tax are made, by reference to accounting periods. (3) Corporation tax which is assessed and charged for an accounting period of a company is assessed and charged on the full amount of profits arising in the accounting period. (4) Subsection (3) is subject to any contrary provision in the Corporation Tax Acts. (5) If a company's accounting period falls within more than one financial year, the amount of the profits arising in the accounting period that is chargeable to corporation tax must be apportioned between the financial years in which the accounting period falls.
Propose a change(1) An accounting period of a company begins— (a) when the company comes within the charge to corporation tax, or (b) immediately after the end of the previous accounting period of the company, if the company is still within the charge to corporation tax. (2) For the purposes of this section a UK resident company is treated as coming within the charge to corporation tax when it starts to carry on business, if it would not otherwise be within the charge to corporation tax. (3) If a chargeable gain or allowable loss accrues to a company at a time which is not (ignoring this subsection) within an accounting period of the company— (a) an accounting period of the company begins at that time, and (b) the gain or loss accrues in that accounting period. (4) This section does not apply if section 12 (companies being wound up) applies. (5) This section is subject to any provision of the Corporation Tax Acts which provides for an accounting period of a company to which this section applies to begin at a different time.
Propose a change(1) An accounting period of a company comes to an end on the first occurrence of any of the following— (a) the ending of 12 months from the beginning of the accounting period, (b) an accounting date of the company, (c) if there is a period for which the company does not make up accounts, the end of that period, (d) the company starting or ceasing to trade, (e) if the company carries on only one trade, coming, or ceasing to be, within the charge to corporation tax in respect of that trade, (f) if the company carries on more than one trade, coming, or ceasing to be, within the charge to corporation tax in respect of all the trades it carries on, (g) the company becoming, or ceasing to be, UK resident, (h) the company ceasing to be within the charge to corporation tax, (i) the company entering administration, and (j) the company ceasing to be in administration. (2) If subsection (1)(i) applies, the accounting period is treated as having ended immediately before the day on which the company enters administration. (3) For the purposes of this section a company enters administration— (a) when it enters administration under Schedule B1 to the Insolvency Act 1986 (c. 45), or (b) when it is subject to a corresponding procedure, other than one under that Act. (4) For the purposes of this section a company ceases to be in administration— (a) when it ceases to be in administration under Schedule B1 to the Insolvency Act 1986, or (b) when a corresponding event occurs, other than under that Act. (5) This section does not apply if section 12 (companies being wound up) applies. (6) This section is subject to any provision of the Corporation Tax Acts which provides for an accounting period of a company to which this section applies to end at a different time.
Propose a change(1) This section applies if a company carrying on more than one trade— (a) does not have the same accounting date for each of the trades, and (b) does not make up general accounts for the whole of the company's activities. (2) The company may choose which of the accounting dates for the trades is to be used for the purpose of section 10(1)(b). (3) But if an officer of Revenue and Customs thinks, on reasonable grounds, that the date chosen by the company is inappropriate, the officer may give notice to the company directing one of the other accounting dates to be used for that purpose instead.
Propose a change(1) This section applies if a company is being wound up. (2) An accounting period of the company ends immediately before the winding up starts. (3) An accounting period of the company begins when the winding up starts. (4) After the winding up starts, an accounting period of the company ends— (a) at the end of the period of 12 months beginning on the first day of the accounting period, or (b) if earlier, when the winding up is completed. (5) After the winding up starts, an accounting period of the company begins immediately after the end of the previous accounting period of the company, if the winding up has not been completed. (6) This section is subject to any provision of the Corporation Tax Acts which provides for an accounting period of a company to which this section applies to begin or end at a different time. (7) For the purposes of this section a winding up of a company starts— (a) when the company passes a resolution for the winding up of the company, (b) when a petition for the winding up of the company is presented, if the company has not already passed such a resolution and a winding up order is made on the petition, or (c) when an act is done in relation to the company for a similar purpose, if the winding up is not under the Insolvency Act 1986 (c. 45).
Propose a change(1) This Chapter contains rules for determining the residence of companies. (2) Section 14 gives the main rule for companies incorporated in the United Kingdom (including SEs and SCEs incorporated in the United Kingdom). (3) Section 15 deals with companies which have been UK resident under the rules of common law and provides for their continued residence when certain circumstances arise. (4) Sections 16 and 17 deal with SEs and SCEs which transfer their registered office to the United Kingdom. (5) Section 18 contains a special rule for companies treated as non-UK resident under double taxation arrangements.
Propose a change(1) A company which is incorporated in the United Kingdom is UK resident for the purposes of the Corporation Tax Acts. (2) Accordingly, even if a different place of residence is given by a rule of law, the company is not resident in that place for the purposes of the Corporation Tax Acts.
Propose a change(1) This section applies to a company which is neither— (a) incorporated in the United Kingdom, nor (b) resident in the United Kingdom by virtue of section 16 or 17. (2) If the company— (a) is no longer carrying on a business, and (b) was UK resident for the purposes of the Corporation Tax Acts immediately before it ceased to carry on business, the company continues to be UK resident for the purposes of the Corporation Tax Acts. (3) If the company— (a) is being wound up outside the United Kingdom, and (b) was UK resident for the purposes of the Corporation Tax Acts immediately before any of its activities came under the control of a foreign liquidator, the company continues to be UK resident for the purposes of the Corporation Tax Acts. (4) In subsection (3) “foreign liquidator” means a person exercising functions which, in the United Kingdom, would be exercisable by a liquidator.
Propose a change(1) This section applies to an SE which transfers its registered office to the United Kingdom in accordance with Article 8 of Council Regulation (EC) No 2157/2001 on the Statute for a European company (Societas Europaea). (2) The SE is UK resident for the purposes of the Corporation Tax Acts from the time of its registration in the United Kingdom. (3) Accordingly, even if a different place of residence is given by a rule of law, the SE is not resident in that place for the purposes of the Corporation Tax Acts. (4) The SE does not cease to be UK resident merely because it later transfers its registered office from the United Kingdom.
Propose a change(1) This section applies to an SCE which transfers its registered office to the United Kingdom in accordance with Article 7 of Council Regulation (EC) No 1435/2003 on the Statute for a European Cooperative Society (SCE). (2) The SCE is UK resident for the purposes of the Corporation Tax Acts from the time of its registration in the United Kingdom. (3) Accordingly, even if a different place of residence is given by a rule of law, the SCE is not resident in that place for the purposes of the Corporation Tax Acts. (4) The SCE does not cease to be UK resident merely because it later transfers its registered office from the United Kingdom.
Propose a change(1) This section applies to a company which is treated as— (a) resident in a territory outside the United Kingdom, and (b) non-UK resident, for the purposes of any double taxation arrangements. (2) For the purposes of the Corporation Tax Acts the company is— (a) resident outside the United Kingdom, and (b) non-UK resident. (3) Subsection (2) applies even if the company would otherwise be UK resident for the purposes of the Corporation Tax Acts by virtue of section 14, 15, 16 or 17 or another rule of law. (4) To decide whether a company is treated as mentioned in subsection (1)(a) and (b) for the purposes of any double taxation arrangements, assume that— (a) the company has made a claim for relief under the arrangements, and (b) in consequence of the claim it falls to be decided whether the company is to be treated as mentioned in subsection (1)(a) and (b) for the purposes of the arrangements.
Propose a change(1) If a ... company makes an election under this section, exemption adjustments are to be made at the appropriate stages in calculating the taxable total profits of the company for each relevant accounting period. (2) For that purpose “exemption adjustments” means any such adjustments as are appropriate to secure that there are left out of account any profits and losses taken into account in arriving at the foreign permanent establishments amount in relation to any relevant accounting period. (2A) But profits and losses are not to be left out of account as mentioned in subsection (2) so far as they are or, if the company were non-UK resident, would be— (a) profits or losses of the company's trade of dealing in or developing UK land (see section 5B), (b) profits or losses of the company's UK property business, (c) profits consisting of the company's other UK property income, or (d) profits or losses arising from loan relationships or derivative contracts that the company is a party to for the purposes of its UK property business or for the purposes of enabling it to generate other UK property income. (2B) Profits and losses are not to be left out of account as mentioned in subsection (2) so far as, if the company were non-UK resident, they would be gains or losses accruing on disposals of assets within section 2B(4)(a) or (b) of TCGA 1992 (interests in UK land or other assets deriving at least 75% of their value from UK land). (3) In this Chapter “relevant accounting period”, in relation to a company by which an election is made under this section, means an accounting period of the company to which the election applies (as to which see section 18F). (4) For the purposes of this Chapter the “foreign permanent establishments amount”, in relation to an accounting period of a company, is— (a) the aggregate of the relevant profits amount in the case of each relevant foreign territory in relation to which there is a relevant profits amount for the accounting period, less (b) the aggregate of the relevant losses amount in the case of each relevant foreign territory in relation to which there is a relevant losses amount for the accounting period. (5) In this Chapter “relevant foreign territory”, in relation to a company, means a territory outside the United Kingdom in which the company carries on, or has carried on, business through a permanent establishment. (6) For the purposes of this Chapter “relevant profits amount”, in relation to a relevant foreign territory and an accounting period of a company, means— (a) in the case of a full treaty territory, profits which would be taken to be attributable to the permanent establishment of the company in the territory for the purpose of ascertaining the amount of any credit to be allowed under TIOPA 2010 (in respect of tax paid under the law of the relevant foreign territory) against corporation tax if the company were to be liable to corporation tax for the accounting period (apart from this Chapter), or (b) in the case of any other territory, profits which would be taken to be so attributable for that purpose if the territory were a full treaty territory and the double taxation arrangements having effect in relation to the territory were in the terms of the OECD model. (7) For the purposes of this Chapter “relevant losses amount”, in relation to a relevant foreign territory and an accounting period of a company, means— (a) in the case of a full treaty territory, any losses which would be taken to be attributable to the permanent establishment of the company in the territory on the application of the same rules and principles as fall to be applied under subsection (6)(a), and (b) in the case of any other territory, any losses which would be taken to be so attributable on that basis if it were a full treaty territory and the double taxation arrangements having effect in relation to the relevant foreign territory were in the terms of the OECD model. (8) Subsection (9) applies if the amount of any credit to be allowed under TIOPA 2010 in relation to a company in the case of a full treaty territory does not depend on the profits taken to be attributable to the permanent establishment of the company in the territory because tax under the law of the territory is charged, pursuant to the double taxation arrangements having effect in relation to the territory, otherwise than by reference to such profits (as an alternative to a charge by reference to such profits). (9) The reference in subsection (6)(a) to profits which would be taken to be attributable to the permanent establishment of the company in the territory is to the profits that would be so taken if tax under the law of the territory were charged by reference to such profits; and subsection (7)(a) is to be construed accordingly. (10) For the purposes of subsections (6) and (7) if double taxation arrangements having effect in relation to a relevant foreign territory do not include provision for the credit to be allowed against tax to be computed by reference to the same profits as those by reference to which the tax was computed under the law of the relevant foreign territory, they are to be assumed to do so. (11) This section is subject to the following provisions of this Chapter.
Propose a change(1) The exemption adjustments required to be made by section 18A(1) include, in the case of any gains or losses on the disposal or realisation of assets which are relevant in the calculation of the taxable total profits of a company for a relevant accounting period, adjustments to remove the effect of any gains or losses relating to the assets taken into account in computing the foreign permanent establishments amount in relation to any relevant accounting period (so that, in appropriate cases, a gain may be increased to reflect a loss so taken into account or a loss increased to reflect a gain so taken into account). (2) The references in section 18A(6) to profits which would be taken to be attributable to the permanent establishment of a company in a territory include any gains in respect of immoveable property which has been used for the purposes of the business carried on by the company through the permanent establishment in the territory (to such extent as is appropriate having regard to the extent to which it has been so used); and the references to losses in section 18A(7) are to be construed accordingly. (3) The references in section 18A(6) to profits which would be taken, in the case of a company in relation to which an election under section 18A has effect, to be attributable to the permanent establishment of the company in a territory (including as extended by subsection (2)) do not include any gains which would be taken to be so attributable for the purposes of ascertaining credit to be allowed in respect of tax payable under the law of the territory before the election has effect; and the references to losses in section 18A(7) are to be construed accordingly.
Propose a change(1) Any allowance under Part 2 of CAA 2001 which, but for section 18A and for section 15(2A)(b) of CAA 2001, could be claimed under section 3(1) of that Act in respect of assets provided for the purposes of a permanent establishment in a territory outside the United Kingdom through which business is or has been carried on by a company in relation to which an election under section 18A has effect (and any charge in connection with any such allowance) is to be made automatically and reflected in any calculation for any relevant accounting period of the company of the profits or losses attributable to business carried on by the company through such a permanent establishment. (2) In the application of section 13 of CAA 2001 by virtue of subsection (1) on the taking effect of the election under section 18A, references to “market value” have effect as references to “transition value” within the meaning of section 62A of that Act in relation to any plant or machinery in the case of which that is the disposal value under section 61 of that Act. (3) In determining any relevant profits amount or relevant losses amount under section 18A(6) or (7) in relation to a company there are to be left out of account any profits or losses arising from a plant or machinery lease under which the company is a lessor if an allowance under CAA 2001 has been made to the company or a connected company in respect of expenditure on the provision of any plant or machinery subject to the lease (otherwise than in accordance with this section). (4) Section 70K of that Act (meaning of “plant or machinery lease” and “lessor”) applies for the purposes of subsection (3). (5) In determining for the purposes of section 18A the amount of any credit to be allowed under TIOPA 2010 in respect of tax under the law of a relevant foreign territory in the case of a company, it is to be assumed that the company made any claim or election (other than a claim for allowances under Part 2 of CAA 2001) which would reduce any relevant profits amount, or increase the relevant losses amount, by any means, and within any time limit, applicable to it.
Propose a changeThe references in section 18A(6) to profits which would be taken to be attributable to the permanent establishment of a company in a territory include any income arising from immovable property which has been used for the purposes of the business carried on by the company through the permanent establishment in the territory (to such extent as is appropriate having regard to the extent to which it has been so used); and the references to losses in section 18A(7) are to be construed accordingly.
Propose a change(1) In determining any relevant profits amount or relevant losses amount under section 18A(6) or (7) in relation to a company, there are to be left out of account any profits or losses of any part of the company's business which consists of the making of investments. (2) Subsection (1) does not apply to profits or losses arising from assets so far as the assets are effectively connected with any part of the permanent establishment through which a trade or overseas property business of the company is carried on in the territory. (3) In subsection (2) “effectively connected” is to be given the same meaning as it would be given for the purposes of the OECD model were subsection (2) contained in the OECD model.
Propose a change(1) In determining any relevant profits amount or relevant losses amount under section 18A(6) or (7) in relation to a company there are to be left out of account profits or losses referable to any transaction between a person who is UK resident and a permanent establishment in a territory outside the United Kingdom through which the company carries on, or has carried on, business (“the foreign territory in question”) if the condition in subsection (2) is met. (2) That condition is that the UK resident would be obliged under Part 15 of ITA 2007 to deduct income tax that is not repayable from payments in respect of the transaction if the payments were made to a company resident in the foreign territory in question (taking account of any double taxation arrangements having effect in relation to the foreign territory in question). (3) But subsection (1) does not apply if the company is a bank unless the transaction forms part of arrangements the main purpose, or one of the main purposes, of which is the avoidance of an obligation under Part 15 of ITA 2007 to deduct income tax from any payments. (4) Section 1120 of CTA 2010 (meaning of “bank”) applies for the purposes of subsection (3).
Propose a change(1) Any relief which would be given under Chapter 2 or 3 of Part 12 is to be taken into account in determining any relevant profits amount or relevant losses amount in the case of a company under section 18A(6) or (7) in relation to a relevant foreign territory in so far as it is linked to the business carried on by the company through a permanent establishment in the territory. (2) The extent to which any such relief is so linked is to be determined on a just and reasonable basis having regard to the extent to which the work of the employees concerned contributes to the purposes of the business so carried on.
Propose a change(1) An election made by a company under section 18A— (a) (subject to subsections (6) to (8) ) is irrevocable, and (b) applies to all accounting periods of the company beginning on or after the relevant day. (2) The relevant day”, in relation to an election made by a UK resident company, means— (a) the day on which, at the time of the election, the company's accounting period following that in which the election is made is expected to begin, or (b) if the election is made before the company's first accounting period, the day on which that accounting period begins. (2A) “The relevant day”, in relation to an election made by a non-UK resident company, means the day on which the company becomes UK resident. (3) Subsection (4) applies if an accounting period of the company (“the straddling period”) begins before, and ends on or after, the relevant day. (4) It is to be assumed, for the purposes of the Corporation Tax Acts, that the straddling period consists of two separate accounting periods— (a) the first beginning with the straddling period and ending immediately before the relevant day, and (b) the second beginning with that day and ending with the straddling period. (5) Where for those purposes it is necessary to apportion the profits and losses for the straddling period to different parts of the period, that apportionment is to be made on a just and reasonable basis. (6) An election can be revoked by the company which made it at any time before the relevant day. (7) An election made by a UK resident company is revoked if the company ceases to be UK resident. (8) An election made by a non-UK resident company is revoked if, having become UK resident, the company ceases to be UK resident.
Propose a change(1) This section applies for the purposes of this Chapter for any relevant accounting period (“period X”) of a company (“company X”) in relation to a territory outside the United Kingdom (“territory X”) if— (a) there is an adjusted relevant profits amount in relation to territory X for period X, (b) the adjusted relevant profits amount includes diverted profits (see section 18H), and (c) none of the exemptions mentioned in section 18I applies for period X. (2) The diverted profits are to be left out of the adjusted relevant profits amount. (3) For the purposes of this Chapter “adjusted”, in relation to a relevant profits amount, is what the relevant profits amount would be if it were determined without reference to gains or losses which are chargeable gains or allowable losses for corporation tax purposes.
Propose a change(1) In section 18G(1)(b) “diverted profits” means so much of company X's total profits of period X as pass through the diverted profits gateway. (2) To determine the extent to which company X's total profits of period X pass through the diverted profits gateway, apply— (a) section 371BB of TIOPA 2010 (controlled foreign companies: the CFC charge gateway), and (b) except Chapter 8 of Part 9A of that Act, the other provisions referred to in that section, as if references to the CFC charge gateway were references to the diverted profits gateway. (3) In applying section 371BB of TIOPA 2010 and the other provisions referred to in it assume— (a) that company X is a CFC resident in territory X, (b) that period X is the CFC's accounting period, and (c) that company X's total profits of period X are the CFC's assumed total profits for the accounting period. (4) Subsection (3)(a) does not require it to be assumed that there is any change in the place or places at which company X carries on its activities. (5) Section 371BB of TIOPA 2010 and the other provisions referred to in it are also to be applied subject to sections 18HA to 18HE below. (6) In this section— (a) references to company X's total profits of period X are to those profits ignoring this Chapter and step 2 in section 4(3) of CTA 2010, and (b) references to section 371BB of TIOPA 2010 are to that section omitting subsection (2)(b).
Propose a changeChapter 3 of Part 9A of TIOPA 2010 (the CFC charge gateway: determining which of Chapters 4 to 8 applies) applies for the purposes of section 18H(2) with the omission of— (a) section 371CA(10)(a), (b) in section 371CB(2), the words “or Chapter 8 (solo consolidation)”, (c) section 371CC(1)(b), (3)(b) and (c), (4) to (7), (9) and (10), (d) section 371CD, (e) section 371CE(2) to (9), and (f) section 371CG.
Propose a change(1) Chapter 4 of Part 9A of TIOPA 2010 (the CFC charge gateway: profits attributable to UK activities) applies for the purposes of section 18H(2) with the following modifications. (2) The modifications are— (a) section 371DA(3)(g)(i) is to be omitted, and (b) in section 371DH(4), after “the accounting period”, in the second place it occurs, there is to be inserted “ or the United Kingdom ”. (3) Section 371VF(3) of TIOPA 2010 (definition of “related” person) is to be applied as relevant with the omission of paragraphs (b) and (c).
Propose a changeChapter 5 of Part 9A of TIOPA 2010 (the CFC charge gateway: non-trading finance profits) applies for the purposes of section 18H(2) with the omission of— (a) in section 371EA(1), the words from “so far as” to the end, and (b) sections 371EB to 371EE.
Propose a changeChapter 7 of Part 9A of TIOPA 2010 (the CFC charge gateway: captive insurance business) applies for the purposes of section 18H(2) with the omission of section 371GA(6)(b).
Propose a change(1) Chapter 9 of Part 9A of TIOPA 2010 (exemptions for profits from qualifying loan relationships) applies for the purposes of section 18H(2) with the following modifications. (2) In section 371IA(2) and (11) the reference to a chargeable company is to be read as a reference to company X (as is the reference in section 371CB(8)); and references elsewhere in Chapter 9 to company C are to be read as references to company X. (3) For section 371IA(5) there is to be substituted— (5) 75% of the profits of each qualifying loan relationship are “exempt” under this Chapter. (4) In section 371IA(9)(a) the words “or Chapter 8 (solo consolidation)” are to be omitted. (5) Sections 371IB to 371IE are to be omitted. (6) Section 371IH(11)(a) is to be read ignoring the modification in section 18HC(b) above. (7) In section 371IJ references to the relevant corporation tax accounting period are to be read as references to period X and subsection (6) is to be omitted.
Propose a change(1) The exemptions referred to in section 18G(1)(c) are the exemptions set out in Chapters 11 to 14 of Part 9A of TIOPA 2010 (controlled foreign companies: exemptions from the CFC charge). (2) In applying those Chapters for the purposes of section 18G(1)(c)— (a) references to section 371BA(2)(b) of TIOPA 2010 are to be read as references to section 18G(1)(c), (b) the assumptions set out in subsection (3) are to be made, and (c) section 371VF(3) of TIOPA 2010 (definition of “related” person) is to be read with the omission of paragraphs (b) and (c). (3) For the purposes of subsection (2)(b), assume— (a) that the permanent establishment which company X has in territory X is a separate company from company X, (b) that the separate company is a CFC resident in territory X, (c) that period X and company X's other accounting periods for corporation tax purposes are accounting periods of the CFC for the purposes of Part 9A of TIOPA 2010, (d) that the CFC's assumed total profits for period X are the adjusted relevant profits amount, (e) that the CFC's assumed taxable total profits for period X are the same as the CFC's assumed total profits for period X, (f) that the CFC is connected with company X and is also connected or associated with any person with whom company X is connected or associated, and (g) that any person who has an interest in company X also has an interest in the CFC. (4) Chapters 11 to 14 of Part 9A of TIOPA 2010 are also to be applied subject to sections 18IA to 18ID below.
Propose a change(1) Chapter 11 of Part 9A of TIOPA 2010 (controlled foreign companies: the excluded territories exemption) applies for the purposes of section 18G(1)(c) with the following modifications. (2) Sections 371KB(1)(b)(iii) and 371KH are to be omitted. (3) Section 371KC is to be omitted and the assumption set out in section 18I(3)(b) above in relation to the CFC's residence is to be applied instead; and references to “the CFC's territory” are to be read accordingly. (4) Section 371KD(3) is to be omitted and references to a CFC's accounting profits for an accounting period are to be read as references to the adjusted relevant profits amount. (5) Section 371KE(2)(b) is to be omitted. (6) Section 371KF is to be omitted. (7) In section 371KG(3) the reference to the CFC's equity or debt is to be read as a reference to company X's equity or debt (ignoring the assumption in section 18I(3)(a) above). (8) Section 371KI(2) and (3) is to be omitted. (9) In section 371KJ— (a) in subsection (2)(a), the reference to intellectual property held by the CFC is to be read as a reference to intellectual property held by company X (ignoring the assumption in section 18I(3)(a) above), and (b) in subsections (2)(b) and (c) and (4), references to the CFC are to be read as references to company X (ignoring that assumption).
Propose a changeChapter 12 of Part 9A of TIOPA 2010 (controlled foreign companies: the low profits exemption) applies for the purposes of section 18G(1)(c) with the omission of section 371LB(2) and (4) and section 371LC(5) and (6).
Propose a change