Change 1 Article Choose an article Title and introductory text 1 Income tax charge for tax year 2023-24 2 Main rates of income tax for tax year 2023-24 3 Default and savings rates of income tax for tax year 2023-24 4 Freezing starting rate limit for savings for tax year 2023-24 5 Charge and main rate for financial year 2024 6 Standard small profits rate and fraction for financial year 2024 7 Temporary full expensing etc for expenditure on plant or machinery 8 Annual investment allowance to remain at £1M beyond temporary period 9 First-year allowance for expenditure on electric vehicle charge points 10 Relief for research and development 11 Treatment of profits from patents etc: small profits rate of corporation tax 12 Energy (oil and gas) profits levy: de-carbonisation allowance 13 Museums and galleries exhibition tax relief: extension of sunset date 14 Extension of the temporary increase in theatre tax credit etc 15 Seed enterprise investment scheme: increase of limits etc. 16 CSOP schemes: share value limit and share class 17 Enterprise management incentives: restricted shares and declarations 18 Lifetime allowance charge abolished 19 Certain lump sums to be taxed at marginal rate 20 Annual allowance increased 21 Money purchase annual allowance 22 Annual allowance: tapering 23 Modification of certain existing transitional protections 24 Collective money purchase arrangements 25 Relief relating to net pay arrangements 26 Payments under Jobs Growth Wales Plus 27 Power to clarify tax treatment of devolved social security benefits 28 Qualifying care relief: increase in individual’s limit 29 Estates in administration and trusts 30 Transfer of basic life assurance and general annuity business 31 Certain re-insurance sums not to count as deemed I-E receipts 32 Insurers in difficulties: write-down orders for corporation tax purposes 33 Insurers in difficulties: write-down orders in case of pension schemes 34 Corporate interest restriction 35 Investment vehicles 36 Share exchanges involving non-UK incorporated close companies 37 Records relating to transfer pricing 38 Double taxation relief: foreign nominal rates 39 Payments to farmers under the lump sum exit scheme etc 40 Contracts completed after ordinary notification period 41 Separated spouses and civil partners 42 Carried interest: election to pay tax as scheme profits arise 43 Relief on disposal of joint interests in land 44 Meaning of “alcoholic product” 45 Alcoholic strength 46 Categories of alcoholic products: regulations 47 Alcohol duty: charge 48 Rates 49 Excise duty point and payment 50 Qualifying draught products: reduced rates 51 Alcoholic products qualifying for draught relief 52 Repackaging qualifying draught products 53 Repackaging in contravention of section 52 (2) 54 Small producer relief: discounted rates 55 Small producer alcoholic products 56 Small production premises 57 “Alcohol production amount” etc 58 Exclusions 59 Duty discount for small producer alcoholic products 60 Assessments where incorrectly low rate of alcohol duty applied 61 Mergers: general provisions 62 Modified “small production premises” test 63 Modified duty discount 64 Adjusted post-merger amount 65 Early termination of merger transition period 66 Subsequent mergers 67 Simultaneous mergers 68 Demergers 69 “Producer”, “production premises”, “group premises” etc 70 Connected persons 71 Index of defined expressions: Chapter 3 72 Exemption: production for personal consumption 73 Research and experiments 74 Spoilt alcoholic products 75 Alcoholic ingredients 76 Imported medical articles 77 Flavourings 78 Authorised use for certain purposes 79 Imported goods not for human consumption 80 Restrictions on use of certain articles 81 Further provision about remission and repayment 82 Approval requirement: producers 83 Supplementary provision about approvals 84 Exemption: production for personal consumption 85 Exemption: research and experiments 86 Mixing alcoholic products 87 Post-duty point dilution of alcoholic products 88 Alcoholic products regulations 89 Penalties and forfeiture 90 Denatured alcohol 91 Licence to manufacture and deal wholesale in denatured alcohol 92 Regulations relating to denatured alcohol 93 Penalties and forfeiture 94 Defaults in respect of denatured alcohol: possession of excess alcoholic products 95 Defaults in respect of denatured alcohol: supply and use of denatured alcohol 96 Inspection of premises etc 97 Prohibition of use of denatured alcohol etc as beverage or medicine 98 Definitions 99 Further provision relating to definitions 100 Approval to carry on controlled activity 101 The register of approved wholesalers 102 Regulations relating to approval, registration and controlled activities 103 Restriction on buying controlled alcoholic products wholesale 104 Offences 105 Penalties 106 Groups 107 Index of defined expressions: Chapter 7 108 Reviews and appeals 109 Forfeiture: supplementary provision 110 Removal of goods: application of section 95 of CEMA 1979 111 Drawback 112 Duty stamps 113 Repeals 114 Minor and consequential amendments 115 Temporary provision: wine 116 Temporary provision: cider 117 Interpretation of this Part 118 Regulations: supplementary and general 119 Regulations: procedure 120 Commencement 121 Introduction to multinational top-up tax 122 Chargeable persons 123 Charge to multinational top-up tax 124 How to calculate top-up amounts etc 125 Administration of multinational top-up tax 126 Meaning of “multinational group” and “ultimate parent” 127 Excluded entities 128 Responsible members 129 Qualifying multinational groups 130 Change in composition of multinational group 131 Whether de-merged groups meet the revenue threshold 132 Effective tax rate 133 Adjusted profits of a member of a multinational group 134 Underlying profits as determined for statements of ultimate parent 135 Underlying profits of permanent establishments 136 Underlying profits accounts 137 No amounts outside of profit and loss account to be included 137A Use of substituted values 138 Profits adjusted to be before tax 139 Profits adjusted to be profits before consolidation adjustments to eliminate intragroup transactions 140 Profits adjusted to be profits before certain purchase accounting adjustments 141 General exclusion of dividends 142 Excluded equity gain or loss 143 Included revaluation method gain or loss 144 Adjustments for asymmetric foreign currency income and losses 145 Exclusion of expenses for illegal payments, fines and penalties 146 Adjustment for changes in accounting policies and prior period errors 147 Accrued pension expense 147A Treatment of tax credits 148 Meaning of qualifying refundable tax credits 148A Transferable tax credits 148B Value of marketable transferable tax credits: originator 148C Value of marketable transferable tax credits: purchaser 149 Arm’s length requirement for certain transactions 150 Transactions between members of a multinational group: differences with accounting for tax 150A Instruments held intragroup: issuer’s accounting treatment to prevail 151 Adjustments for companies in distress 152 Adjustments where life assurance business carried on 153 Exclusion of certain insurance reserve movement expense 154 Exclusion of qualifying intra-group financing arrangement expenses 155 Qualifying tier one capital 156 Exclusion of international shipping profits 157 Core international shipping profits 158 Ancillary international shipping profits 159 Permanent establishment income and expense attribution 160 Attribution of losses between permanent establishment and main entity 161 Election to use realisation principle 162 Election to reflect deductions for stock-based compensation 163 Election to spread certain capital gains over five years 164 Election to exclude intra-group transactions 165 Election to have excluded equity gains and losses included 166 Election in relation to hedging currency risk in ownership interests 167 Underlying profits of hybrids 168 Underlying profits of transparent ... entities 169 Certain non tax resident entities to be treated as flow-through entities 170 Adjustments for ultimate parent that is a flow-through entity 171 Ultimate parent subject to qualifying dividend regime 172 Application of section 171 to members in the same territory as the ultimate parent 173 Covered taxes 174 Amount of covered tax balance 175 Amounts excluded from qualifying current tax expense 176 Amounts to be reflected in qualifying current tax expense 176A Meaning of “non-marketable transferable tax credits” 176B Value of non-marketable transferable tax credits: originator 176C Value of non-marketable transferable tax credits: purchaser 176D Tax credits etc allocated under tax equity partnerships 176E Flow-through tax benefits: proportional amortisation method 176F Flow-through tax benefits: subtraction method 176G Clawback of earlier qualifying flow-through tax benefits 177 Permanent establishments 178 Reallocation of tax expense 179 Controlled foreign company tax regimes 180 Blended CFC regimes 180A Section 180: further provision 181 Distributions from other members of a group 181A Cross-border allocation of current tax under cross-crediting regime 181B Cross-border allocation of deferred tax assets and liabilities 182 Total deferred tax adjustment amount 183 Qualifying foreign tax credits (substitute loss carry forward assets) 183A Alternative to section 183 where carry forward of credits not permitted 184 Recaptured deferred tax liabilities 185 Inclusion of existing deferred tax assets and liabilities on entry into regime 186 Deferred tax assets recorded at less than minimum rate 187 Election for losses to be treated as special loss deferred tax assets 188 Further provision about elections under section 187 189 Deemed distribution tax election 190 Deemed distribution tax amount 191 Reduction of recapture amount 192 Recalculation where member leaves the group 193 Calculation of top-up amounts 194 Total top-up amount for a territory 195 Substance based income exclusion 196 Eligible payroll costs 197 Eligible tangible asset amount 197A Operating leases 198 Eligible payroll costs and eligible tangible asset amount: permanent establishments 198ZA Eligible payroll costs: flow-through entities 198ZB Eligible tangible asset amount: flow-through entities 198ZC Eligible payroll costs and eligible tangible asset amount: flow-through ultimate parent 198A Power to make provision about treatment of payroll costs and assets 199 Election to treat certain top-up amounts as nil 200 Top-up amounts multiplied by inclusion ratio 201 Inclusion ratio 202 Covered taxes balance less than nil when members in a territory have a profit 203 Additional top-up amounts where covered taxes less than expected 204 Allocation of collective additional amount under section 203 to members 205 Election to carry forward and reduce collective additional amount 206 Additional top-up amounts where recalculations required 207 Allocation of collective additional amounts under section 206 to members 208 Member joining or leaving multinational group 209 When transfer of controlling interest treated as acquisition of assets and liabilities 210 Transfer of assets or liabilities from a member of a multinational group 211 Transfer of assets or liabilities to a member of a multinational group 212 Meaning of “qualifying reorganisation” 213 Investment entity tax transparency election 214 Taxable distribution method election 215 Undistributed income amount 216 Election where assets and liabilities adjusted to fair value for tax purposes 217 Post filing adjustments of covered taxes 218 Effect of rate changes to deferred tax expense 219 Adjustment where covered taxes not paid 220 Top-up amount of investment entity 221 Substance based income exclusion for investment entity 222 Investment entity effective tax rate 223 Adjustments 224 Additional top-up amounts of investment entities 225 Attribution of top-up amounts and additional top-up amounts to responsible member 226 Joint venture group 227 Application of Part to joint venture groups 228 Minority owned members 229 Multi-parent groups 229A Meaning of potentially undertaxed 229B Untaxed amounts 229C Allocation of untaxed amount to members 229D Amount allocated to the United Kingdom 229E Allocation to qualifying members 229F Election to make one member of a group liable for untaxed amounts 229G Number of employees 229H Value of tangible fixed assets 229I Joint ventures 229J References to responsible members 230 Meaning of terms and concepts used in this Part 231 Meaning of entity 232 Permanent establishments ... 232ZA Legal main entity distinct from main entity 232A Partnerships 233 Treatment of protected cell companies 234 Governmental, international and non-profit entities 235 Pension funds and pension services entities 236 Investment funds and investment entities 237 Intermediate and partially-owned parent members 238 Tax transparency of entities 239 Location of entities 240 Location of flow-through entities and permanent establishments 241 Pillar Two territories 242 Ownership interests and controlling interests 243 Calculating percentage ownership interests of a specific entity or individual 244 Calculating percentage ownership interests of a class 245 Calculating percentage ownership interests: excluded entities 246 Calculating percentage direct and indirect ownership interests 247 Timing of transfers of interests 248 Exclusion of indirect interests held through ultimate parent 249 Consolidated financial statements 250 Acceptable accounting standards 251 Accounting periods 251A Meaning of country-by-country report 252 Application to sovereign wealth funds 253 Disqualified and qualified refundable imputation taxes 254 Use of currency 255 Pillar Two rules 256 Qualifying domestic top-up tax 256A Qualifying domestic top-up tax treated as not accruing where contested etc 257 Qualifying undertaxed profits tax 258 Meaning of “connected” 259 Other definitions 260 Transitional provision and safe harbours 261 Index of defined expressions 262 Power to amend to ensure consistency with Pillar Two 263 Regulations 264 Multinational top-up tax to apply from 31 December 2023 265 Introduction to domestic top-up tax 266 Qualifying entities 267 DTT excluded entities 267A Securitisation companies in a group treated as not consolidated 268 Permanent establishments 268A Partnerships 269 Chargeable persons 270 Amount charged 271 Election to make one member of a group liable for amounts charged 272 Determining top-up amounts of entity that is a member of a group 272A Treatment of covered bond vehicles 273 Determining top-up amounts of entity that is not a member of a group 273A References to Pillar Two rules 273B Effect of becoming subject to Pillar Two rules 273C Dividends from protected cell companies 274 Application of section 262 275 Application of Schedule 14 276 Application of transitional provision 277 Index of defined expressions 278 Domestic top-up tax to apply from 31 December 2023 279 Charge on exceptional generation receipts 280 Key concepts (generating undertaking etc) 281 Benchmark amount 282 Attribution of generation 283 Generation receipts 284 Allowable costs 285 Exceptional generation fuel costs 286 Exceptional revenue sharing costs 287 Groups 288 Lead member of a group and its qualifying periods 289 Liability of members of groups 290 Election for members with significant minority shareholding to pay levy 291 Qualifying partnerships 292 Qualifying joint ventures 293 Non-chargeable amounts of joint venture to be attributed to participants 294 Generation acquired and supplied by JV participants 295 Arrangements that reflect receipts (JV participants) 296 Generation acquired and supplied by significant minority shareholders 297 Arrangements that reflect receipts (significant minority shareholders) 298 Surrender of shortfalls 299 Amount that may be surrendered and use of that amount 300 Election to treat certain companies as transparent 301 Effect of company being transparent 302 General application of corporation tax administration 303 Company tax returns 304 Requirement to provide information about payments 305 Claims to shortfall amounts 306 Application of Part 5A of TMA 1970 and Instalment Payments Regulations 307 Application of Part 5 of CTA 2010 for the purposes of determining interests 308 Anti-avoidance 309 Information sharing 310 Interaction of electricity generator levy with corporation tax 311 Regulations under this Part 311A Meaning of “qualifying new generating plant” 312 Minor definitions relating to electricity market 313 Definitions in this Part 314 Transactions funded with the assistance of a public subsidy 315 Deposit schemes 316 Dumping, subsidisation and safeguarding remedies 317 Rulings as to method of valuation of goods 318 Discharging goods from free-circulation procedure subject to guarantee 319 Excepted machines etc 320 Rates of tobacco products duty 321 Flavour concentrates 322 New bands and rates 323 Northern Ireland rates 324 Rates of vehicle excise duty 325 Reform of HGV road user levy 326 End of exempt period for HGV road user levy 327 Rates of landfill tax 328 Rates of climate change levy 329 Rate of plastic packaging tax 330 Aggregates levy: exemptions and exploitation 331 Designation of sites 332 Sunset date for reliefs 333 Right to repayment of income tax to be inalienable 334 Late payment interest on value added tax 335 Penalties for failure to pay value added tax 336 VAT credits: repayment interest due where evidence not provided 337 Insurance premium tax: power to make regulations about notifications 338 Penalties for failure to make payments of plastic packaging tax on time 339 Approval of aerodromes 340 Approved aerodromes: minor and consequential amendments 341 Temporary approvals etc 342 Licensing authorities: requirements to give or obtain tax information 343 Section 342: consequential amendments 344 Definition of “charity” restricted to UK charities 345 Definition of “community amateur sports club” restricted to UK clubs 346 Exemptions from tax 347 Abolition of the Office of Tax Simplification 348 Pension benefits and inheritance tax 349 International arrangements for exchanging information 350 Payment of unclaimed money in court into the Consolidated Fund 351 Financial sanctions regulations: prohibition on certain payments by HMRC 352 Communications data 353 Interpretation 354 Short title Schedule 1 Relief for research and development Schedule 2 Estates in administration and trusts Schedule 3 Corporate interest restriction etc. Schedule 4 Investment vehicles Schedule 5 Records relating to transfer pricing Schedule 6 Categories of alcoholic products: interpretation Schedule 7 Rates of alcohol duty Schedule 8 Qualifying draught products: reduced rates Schedule 9 Small producer alcoholic products: duty discount Schedule 10 Penalties for contraventions of alcohol wholesaling provisions Schedule 11 Alcohol duty: reviews and appeals Schedule 13 Alcohol duty: minor and consequential amendments Schedule 14 Administration of multinational top-up tax Schedule 15 Multinational top-up tax: elections Schedule 16 Multinational top-up tax: transitional provision Schedule 16A Multinational top-up tax: safe harbours Schedule 17 Index of expressions defined or explained in Parts 3 and 4 Schedule 18 Administration of domestic top-up tax Schedule 19 Dumping, subsidisation and safeguarding remedies Schedule 20 Bilateral safeguarding remedies Schedule 21 Soft drinks industry levy: flavour concentrates Schedule 22 Reforms of HGV road user levy Schedule 23 Freeports and investment zones: consequential amendments Schedule 24 Homes for Ukraine Sponsorship Scheme: exemptions from tax
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164 Election to exclude intra-group transactions
(1) The filing member of a multinational group may elect that standard members of the group that are located in the same territory and are included in a tax consolidation group are to apply the consolidated accounting treatment of the ultimate parent to eliminate income, expenses, gains and losses arising from transactions between those members.
(2) Where an election under this section has effect—
(a) the underlying profits of those members are to be adjusted accordingly in the accounting periods for which the election has effect, and
(b) the underlying profits of those members are to be adjusted for the first accounting period for which the election has effect so as to ensure that there are no duplications or omissions of items of income, expenses, gains or losses arising from the making of the election.
(3) Paragraph 1 of Schedule 15 (long term elections) applies to an election under this section.
(4) Where an election under this section is revoked, the underlying profits of the members to whom the election applied are to be adjusted in the first accounting period in which the revocation has effect so as to ensure that there are no duplications or omissions of items of income, expenses, gains or losses arising from the revocation of the election.
(5) For the purposes of this section, members of a multinational group in a territory are included in a “tax consolidation group” if under the law of that territory the income, expenses, gains or losses of those members may for tax purposes be aggregated, surrendered to each other or otherwise shared or transferred between them as a result of a connection between those members.
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164 Election to exclude intra-group transactions
(1) The filing member of a multinational group may elect that standard members of the group that are located in the same territory and are included in a tax consolidation group are to apply the consolidated accounting treatment of the ultimate parent to eliminate income, expenses, gains and losses arising from transactions between those members.
(2) Where an election under this section has effect—
(a) the underlying profits of those members are to be adjusted accordingly in the accounting periods for which the election has effect, and
(b) the underlying profits of those members are to be adjusted for the first accounting period for which the election has effect so as to ensure that there are no duplications or omissions of items of income, expenses, gains or losses arising from the making of the election.
(3) Paragraph 1 of Schedule 15 (long term elections) applies to an election under this section.
(4) Where an election under this section is revoked, the underlying profits of the members to whom the election applied are to be adjusted in the first accounting period in which the revocation has effect so as to ensure that there are no duplications or omissions of items of income, expenses, gains or losses arising from the revocation of the election.
(5) For the purposes of this section, members of a multinational group in a territory are included in a “tax consolidation group” if under the law of that territory the income, expenses, gains or losses of those members may for tax purposes be aggregated, surrendered to each other or otherwise shared or transferred between them as a result of a connection between those members.
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