(1) In this Chapter—
“control” has the same meaning as in Part 10 (see sections 450 and 451),
“group” means a company which has one or more 75% subsidiaries together with those subsidiaries (but there is a separate definition of “group” for the purposes of section 1081(5)(d)),
“holding company” means a company whose business (ignoring any trade carried on by it) consists wholly or mainly of holding shares or securities of one or more companies which are its 75% subsidiaries,
“member” where the reference is to a member of a company—
in section 1088(2) includes a person who is a member otherwise than by virtue of holding shares forming part of the ordinary share capital of the company, but
elsewhere only includes persons who are members by virtue of holding shares forming part of the ordinary share capital of the company,
“shares” includes stock,
“trade”, except in subsection (4), does not include dealing in shares, securities, land, trades or commodity futures,
“trading activities” is to be read in accordance with the above definition of “trade”,
“trading company” means a company whose business consists wholly or mainly of carrying on a trade or trades, and
“trading group” means a group the business of whose members (taken together) consists wholly or mainly of carrying on a trade or trades.
(2) In determining for the purposes of sections 1076(a), 1077(1), 1082(4) or 1084(2) whether a company (“A”) whose shares are transferred by the distributing company is a 75% subsidiary of the distributing company, ignore any share capital of A which is owned indirectly by the distributing company.
(3) In determining for the purposes of this Chapter whether one company is a 75% subsidiary of another, the other company is treated as not being the owner of—
(a) any share capital which it owns directly in a body corporate as trading stock, or
(b) any share capital which it owns indirectly and which is owned directly by a body corporate as trading stock.
(4) For the purposes of subsection (3) share capital owned by a person is owned as trading stock if (and only if) a profit on a sale of the shares would be treated as a trading receipt of that person's trade.
1100 Certain distributions: right to request a statement
(1) If a company makes a distribution to which this section applies, the recipient is entitled to ask the company to provide a statement in writing showing—
(a) the amount or value of the distribution, ...
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) The request must be in writing.
(4) The company which makes the distribution has a duty to comply with a request under subsection (1), and that duty is enforceable by the recipient.
(4A) This section applies to any distribution other than one which is a distribution for the purposes of the Corporation Tax Acts only because it falls within paragraph C or D in section 1000(1) (redeemable share capital or security issued as bonus in respect of shares in, or securities of, the company).
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) This section does not affect the operation of section 1104 (duty to provide tax certificates).
(7) This section , and sections 1101 to 1103, need to be read with section 396A(2) of ITTOIA 2005 (which treats certain receipts as distributions to which this section applies ).
1101 Other distributions etc: returns and information
(1) If a company makes a distribution to which section 1100 does not apply , it must make a return to an officer of Revenue and Customs.
(2) The return must—
(a) contain particulars of the transaction giving rise to the distribution,
(b) state the name and address of the recipient, or each recipient, of the distribution, and
(c) state the amount or value of the distribution received by the recipient, or each recipient.
(3) The return must be made—
(a) within 14 days from the end of the accounting period in which the distribution is made, or
(b) if the date on which the distribution is made does not fall in an accounting period, within 14 days from that date.
(4) If it is not apparent whether or not a transaction gives rise to a distribution to which section 1100 does not apply , the company—
(a) must make a return to an officer of Revenue and Customs containing particulars of the transaction, and
(b) must do so within the time limit that would be given by subsection (3) if the transaction did give rise to such a distribution.
(5) If subsection (4) applies, an officer of Revenue and Customs may serve a notice on the company requiring it to provide any further information in relation to the transaction that the officer reasonably requires.
(6) If it appears to an officer of Revenue and Customs that particulars of any transaction should have been, but have not been, included in a return under subsection (1) or (4), the officer may serve a notice on the company requiring it to provide any information relating to the transaction that the officer reasonably requires.
(7) The company must provide the information required under subsection (5) or (6) within the time specified in the notice.
1102 Other distributions etc: additional information
(1) This section—
(a) gives officers of Revenue and Customs power to require persons to provide information for the purposes of section 1101, and
(b) applies only if section 1101(1), (4) or (6) applies.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) Subsections (4) and (5) apply if a company (“the issuing company”) appears to an officer of Revenue and Customs to be a close company.
(4) The officer may, for the purposes of section 1101, by notice require the issuing company to provide the officer with—
(a) particulars of any bearer securities issued by the company,
(b) the names and addresses of the persons to whom the securities were issued, and
(c) details of the amounts issued to each person.
(5) The officer may, for the purposes of section 1101, by notice require—
(a) any person to whom bearer securities were issued by the company, or
(b) any person to or through whom bearer securities issued by the company were subsequently sold or transferred,
to provide any further information that the officer reasonably requires with a view to enabling the officer to find out the names and addresses of the persons beneficially interested in the securities.
(6) In this section—
“securities” includes—
shares, stocks, bonds, debentures and debenture stock, and
any promissory note or other instrument evidencing indebtedness to a loan creditor of the company, and
“loan creditor” has the meaning given by section 453.
1103 Power to modify or replace sections 1101 and 1102
(1) The Commissioners for Her Majesty's Revenue and Customs may by regulations modify, supplement or replace any of the provisions of sections 1101 and 1102 for the purpose stated in subsection (2).
(2) That is the purpose of requiring UK resident companies to—
(a) make returns, and
(b) give information,
to an officer of Revenue and Customs in respect of distributions made by the companies to which section 1100 does not apply .
(3) References in this Act and in any other enactment to sections 1101 and 1102 are to be read as including a reference to any regulations made under this section.
(4) Regulations under this section may authorise the Commissioners to make special arrangements as regards the matter specified in subsection (5) if in their opinion there are circumstances justifying it.
(5) That matter is —
(a) the repayment of income tax borne by a company, ...
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) Regulations under this section may—
(a) make different provision for different descriptions of companies and for different circumstances, and
(b) contain incidental, supplemental, consequential and transitional provision and savings.
(7) No regulations may be made under this section unless a draft of the statutory instrument containing them has been laid before and approved by a resolution of the House of Commons.
1104 Company distributing dividend or interest: duty to provide tax certificates
(1) This section applies if a distribution consisting of any dividend or interest is made by a company which is—
(a) a company as defined in section 1(1) of the Companies Act 2006, or
(b) a company created by letters patent or by or in pursuance of an Act.
(2) If the company makes a payment of dividend or interest into a bank or building society account held by any person the company must, within a reasonable period, send a tax certificate (see section 1106) to either—
(a) the bank or building society, or
(b) the person holding the account.
(3) If the company makes a payment of dividend or interest to a person without paying it into a bank or building society account, the company must, within a reasonable period, send a tax certificate to that person.
(1) This section applies if—
(a) a tax certificate is received by a person under section 1104(2)(b) or (3), and
(b) the sum concerned (or part of it)—
(i) is paid to that person as nominee for another person, or
(ii) is paid into the account of that person as nominee for another person.
(2) If the nominee pays the sum (or the part concerned) into a bank or building society account held by the other person the nominee must, within a reasonable period, send a tax certificate to either—
(a) the bank or building society, or
(b) the other person.
(3) If the nominee pays the sum (or the part concerned) to the other person without paying it into a bank or building society account held by that person, the nominee must, within a reasonable period, send a tax certificate to that person.
(1) A person who fails to comply with section 1104(2) or (3) or section 1105(2) or (3) is liable to a penalty of £60 for each offence.
(2) But, in respect of offences connected with any one distribution of dividends or interest, the total amount of any penalties imposed on a person under subsection (1) must not exceed £600.
1108 Alternative means of compliance with sections 1104 and 1105
(1) The Commissioners for Her Majesty's Revenue and Customs may by regulations provide that a person may comply with section 1104(2) or (3) or section 1105(2) or (3) either—
(a) by acting in accordance with the subsection concerned, or
(b) by acting in accordance with rules contained in the regulations.
(2) Regulations under subsection (1) may make different provision for different circumstances.
(1) This section applies if two or more companies enter into arrangements to make distributions to each other's members.
(2) For the purposes mentioned in subsection (3) all parties concerned (however many) may be treated as if anything done by any one of those companies had been done by any one of the others.
(3) The purposes are those of this Part except sections 1054 to 1058 and 1064 to 1071.
(1) In this Part “in respect of shares in the company”, in relation to a company which is a member of a 90% group, means in respect of shares in—
(a) that company, or
(b) any other company in the group.
(2) Nothing in subsection (1) requires a company to be treated as making a distribution to any company which is in the same group and is UK resident.
(3) For the purposes of this Part a thing is regarded as done in respect of a share if it is done to a person—
(a) as the holder of the share, or
(b) as the person who held the share at a particular time.
(4) For the purposes of this Part a thing is also regarded as done in respect of a share if it is done in pursuance of a right granted, or an offer made, in respect of a share.
(5) Subsections (3) and (4) do not affect the meaning of “in respect of shares” in section 1054 (building society payments).
(6) In this section “90% group” means a company and all its 90% subsidiaries.
(1) In this Part “in respect of securities of the company”, in relation to a company which is a member of a 90% group, means in respect of securities of—
(a) that company, or
(b) any other company in the group.
(2) Nothing in subsection (1) requires a company to be treated as making a distribution to any company which is in the same group and is UK resident.
(3) For the purposes of this Part, except where the context otherwise requires—
(a) interest paid by a company on money advanced without the issue of a security for the advance, or
(b) other consideration given by a company for the use of money so advanced,
is treated as if paid, or given, in respect of a security issued for the advance by the company.
(4) For the purposes of this Part a thing is regarded as done in respect of a security if it is done to a person—
(a) as the holder of the security, or
(b) as the person who held the security at a particular time.
(5) For the purposes of this Part a thing is also regarded as done in respect of a security if it is done in pursuance of a right granted, or an offer made, in respect of a security.
(6) In this section “90% group” means a company and all its 90% subsidiaries.
(1) In this Part, unless the context otherwise requires—
(a) “new consideration” means consideration not provided (directly or indirectly) out of assets of the company, and
(b) in particular, “new consideration” does not include amounts retained by the company by way of capitalising a distribution.
But paragraph (a) is subject to the other subsections of this section.
(2) Subsection (3) applies if—
(a) share capital has been issued at a premium representing new consideration, and
(b) any part (“the applied part”) of that premium is afterwards applied in paying up share capital.
(3) The applied part of the premium is also treated as new consideration for that share capital.
But the premium is not so treated so far as it has been taken into account under section 1025(2) so as to enable a distribution to be treated as a repayment of share capital.
(4) The general rule is that no consideration derived from the value of any share capital or security of a company, or from voting or other rights in a company, is to be treated for the purposes of this Part as new consideration.
(5) The general rule in subsection (4) applies unless the consideration consists of—
(a) money or value received from the company as a non-CD distribution,
(b) money received from the company as a payment which for the purposes of this Part constitutes a repayment of the share capital in question, or of the principal secured by the security in question, or
(c) the giving up of the right to the share capital or security on its cancellation, extinguishment or acquisition by the company.
This is subject to subsection (6).
(6) No amount is regarded as new consideration by virtue of subsection (5)(b) or (c) so far as it exceeds—
(a) any new consideration received by the company for the issue of the share capital or security in question, or
(b) in the case of share capital which constituted a non-CD distribution on issue, the nominal value of that share capital.
(7) In this section “non-CD distribution” means any distribution other than one which is a distribution for the purposes of the Corporation Tax Acts only because it falls within paragraph C or D in section 1000(1) (redeemable share capital or security issued as bonus in respect of shares in, or securities of, the company).
1116 References to married persons, or civil partners, living together
Individuals who are married to, or are civil partners of, each other are treated for the purposes of this Part as living together unless—
(a) they are separated under an order of a court of competent jurisdiction,
(b) they are separated by a deed of separation, or
(c) they are in fact separated in circumstances in which the separation is likely to be permanent.
(1) In this Part, except where the context otherwise requires—
“security” includes securities not creating or evidencing a charge on assets, and
“share” includes stock, and any other interest of a member in a company.
(2) Subsection (1) does not affect the meaning of “share” in section 1054 (building society payments).
(3) For the purposes of this Part a distribution is treated as made out of assets of a company if the cost falls on the company.
(4) For the purposes of this Part consideration is treated as provided out of assets of a company if the cost falls on the company.
(5) References in this Part to issuing share capital as paid up also apply to the paying up of any issued share capital.
(6) If securities—
(a) are issued at a price less than the amount repayable on them, and
(b) are not listed on a recognised stock exchange,
then, for the purposes of this Part the principal secured is not taken to exceed the issue price, unless the securities are issued on terms reasonably comparable with the terms of issue of securities listed on a recognised stock exchange.
(7) For the purposes of this Part, if something done in respect of shares is done by reference to share holdings at a particular time, it is regarded as done—
(a) to the then holders of the shares, or
(b) to the personal representatives of any holder then dead.
(8) For the purposes of this Part, if something done in respect of securities is done by reference to holdings of securities at a particular time, it is regarded as done—
(a) to the then holders of the securities, or
(b) to the personal representatives of any holder then dead.
(1) This Chapter contains definitions for the purposes of the Corporation Tax Acts.
(2) Section 1119 lists the definitions and either sets them out in full or indicates where they are set out in full.
(3) The definitions set out in sections 1120, 1129, 1138 and 1139 apply only for the purposes of the provisions of the Corporation Tax Acts that apply them.
(4) The definitions set out in sections 1122 and 1124 apply only for the purposes of provisions of the Corporation Tax Acts—
(a) which apply them, or
(b) to which they are applied (see section 1316 of CTA 2009 and section 1176 of this Act).
(5) The other definitions apply for the purposes of the Corporation Tax Acts unless otherwise indicated (whether expressly or by implication).
The definitions referred to in section 1118(2) are—
“accounting date” means the date to which a company makes up its accounts,
“accounting period” is to be read in accordance with Chapter 2 of Part 2 of CTA 2009,
“Act” includes Northern Ireland legislation,
“allowable loss”, in relation to corporation tax in respect of chargeable gains, has the same meaning as in TCGA 1992 (see section 288(1) of that Act),
“authorised unit trust” has the same meaning as in Chapter 2 of Part 13 (see sections 616 and 619),
“bank” is to be read in accordance with section 1120,
“basic rate” means the rate of income tax determined in pursuance of section 6(2) of ITA 2007,
“body of persons” means any body politic, corporate or collegiate and any company, fraternity, fellowship and society of persons whether corporate or not corporate,
“branch or agency” means any factorship, agency, receivership, branch or management,
“building society” means a building society within the meaning of the Building Societies Act 1986,
“capital allowance” means any allowance under CAA 2001,
“the Capital Allowances Act” means CAA 2001,
“the charge to corporation tax on income” has the same meaning as in CTA 2009 (see section 2(3) of that Act),
“chargeable gain” has the same meaning as in TCGA 1992,
“chargeable period” means an accounting period of a company or a tax year,
“chargeable profits”, in relation to a non-UK resident company carrying on a trade in the United Kingdom through a permanent establishment, has the meaning given by section 19 of CTA 2009,
...
“close company” is to be read in accordance with Chapter 2 of Part 10 (see in particular section 439),
“company” has the meaning given by section 1121,
“connected”, in relation to two persons being connected with one another, is to be read in accordance with sections 1122 and 1123,
“control”, in relation to the control of a body corporate or a partnership, is to be read in accordance with section 1124,
“derivative contract” has the same meaning as in Part 7 of CTA 2009,
“distribution” has the meaning given by Chapters 2 to 5 of Part 23,
“farming” has the meaning given by section 1125,
“the financial year 2010” means the financial year beginning with April 2010 (and any corresponding expression in which a year is similarly mentioned is to be read in the same way),
“for accounting purposes” has the meaning given by section 1127(4),
“forestry” is to be read in accordance with section 1125,
...
“generally accepted accounting practice” has the meaning given by section 1127(1) and (3),
“grossing up” is to be read in accordance with section 1128,
“group relief” has the meaning given by section 97(2),
“hire-purchase agreement” is to be read in accordance with section 1129,
“income” includes anything to which the charge to corporation tax on income applies,
“international accounting standards” has the meaning given by section 1127(5),
“investment trust” has the meaning given by section 1158,
“loan relationship” has the same meaning as in Part 5 of CTA 2009,
“local authority” has the meaning given by section 1130,
“local authority association” has the meaning given by section 1131,
“main ring fence profits rate” has the meaning given by section 279A(4),
“market gardening” has the meaning given by section 1125(5),
“non-UK resident” means not resident in the United Kingdom (and references to a non-UK resident are to a person not resident there),
“notice” means notice in writing,
“offshore installation” has the meaning given by sections 1132 and 1133,
“oil and gas exploration and appraisal” has the meaning given by section 1134,
“ordinary share capital”, in relation to a company, means all the company's issued share capital (however described), other than capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the company's profits,
“overseas property business” has the meaning given by Chapter 2 of Part 4 of CTA 2009,
“period of account”—
in relation to a person, means any period for which the person draws up accounts, and
in relation to a trade or other business, means any period for which the accounts of the business are drawn up,
“permanent establishment”, in relation to a company, is to be read in accordance with Chapter 2 of this Part,
“personal representatives”, in relation to a person who has died, means—
in the United Kingdom, persons responsible for administering the estate of the deceased, and
in a territory outside the United Kingdom, those persons having functions under its law equivalent to those of administering the estate of the deceased,
“property investment LLP” has the meaning given by section 1135,
“qualifying charitable donation” has the same meaning as in Part 6 (see section 190),
...
“recognised stock exchange” has the meaning given by section 1137,
...
“registered pension scheme” has the meaning given by section 150(2) of FA 2004,
“registered society” means—
a registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014,
a society registered or treated as registered under the Industrial and Provident Societies Act (Northern Ireland) 1969,
a society registered as a credit union under the Credit Unions (Northern Ireland) Order 1985 ( S.I. 1985/1205 (N.I. 12)), or
an SCE formed in accordance with Council Regulation ( EC ) No 1435/2003 on the Statute for a European Cooperative Society,
...
“research and development” is to be read in accordance with section 1138,
“retail prices index” means—
the general index of retail prices (for all items) published by the Statistics Board, or
if that index is not published for a relevant month, any substituted index or index figures published by that Board,
“scheme administrator”, in relation to a pension scheme, has the meaning given by section 270 of FA 2004 (but see also sections 271 to 274 of that Act),
“settled property” (together with references to property comprised in a settlement) is to be read in accordance with section 466 of ITA 2007 (as a result of the application of that section for the purposes of the Corporation Tax Acts by section 1169 below),
“settlor” is to be read in accordance with sections 467 to 473 of ITA 2007 (as a result of the application of those sections for the purposes of the Corporation Tax Acts by section 1169 below),
“51% subsidiary”, “75% subsidiary” and “90% subsidiary”, in relation to bodies corporate, is to be read in accordance with Chapter 3 of this Part,
“tax”, if neither income tax nor corporation tax is specified, means either of those taxes,
“tax advantage” has the meaning given by section 1139,
...
“tax year” means a year for which income tax is charged (see section 4(2) of ITA 2007),
“the tax year 2010-11” means the tax year beginning on 6 April 2010 (and any corresponding expression in which two years are similarly mentioned is to be read in the same way),
“total profits”, in relation to an accounting period of a company, is to be read in accordance with section 4(3) and (4),
“trade” includes any venture in the nature of trade,
“trade of dealing in or developing UK land”, in relation to a non-UK resident company, has the meaning given by section 5B of CTA 2009,
“tribunal” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal,
“UK generally accepted accounting practice” has the meaning given by section 1127(2),
“UK property business” has the meaning given by Chapter 2 of Part 4 of CTA 2009,
“UK resident” means resident in the United Kingdom (and references to a UK resident are to a person resident there),
“unauthorised unit trust” has the meaning given by section 1140,
“unit holder” has the same meaning as in Chapter 2 of Part 13 (see sections 616 and 619),
“unit trust scheme” has the meaning given by section 237 of FISMA 2000,
“venture capital trust” and “VCT” have the same meaning as in Part 6 of ITA 2007,
“woodlands” has the meaning given by section 1125(4),
“year of assessment” means a tax year, and
“the year 2010-11” means the tax year 2010-11 (and any corresponding expression in which two years are similarly mentioned is to be read in the same way).
(1) This section has effect for the purposes of the provisions of the Corporation Tax Acts which apply this section.
(2) “Bank” means—
(a) the Bank of England,
(b) a person who has permission under Part 4A of FISMA 2000 to accept deposits (but see subsection (3) for exclusions),
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(d) the European Investment Bank, and
(e) an international organisation designated as a bank for the purposes of this section by an order made by the Treasury.
(3) The reference to a person who has permission under Part 4A of FISMA 2000 to accept deposits does not include—
(a) a building society,
(b) a society registered within the meaning of the Friendly Societies Act 1974 or incorporated under the Friendly Societies Act 1992,
(c) a society registered as a credit union under the Co-operative and Community Benefit Societies Act 2014 or the Credit Unions (Northern Ireland) Order 1985 (S.I. 1985/1205 (N.I. 12)), or
(d) an insurance company within the meaning of section 275 of FA 2004.
(4) The Treasury may designate an international organisation for the purposes of this section only if the United Kingdom is a member of the organisation.
(5) An order under subsection (2)(e) may include provision for a designation to have effect only in relation to the application of this section by a provision specified in the order.
(1) In the Corporation Tax Acts “company” means any body corporate or unincorporated association, but does not include a partnership, a co-ownership scheme (as defined by section 235A of the Financial Services and Markets Act 2000), a local authority or a local authority association.
(2) Subsection (1) needs to be read with section 617 (under which the trustees of an authorised unit trust are treated for certain purposes as a UK resident company).
(1) This section has effect for the purposes of the provisions of the Corporation Tax Acts which apply this section (or to which this section is applied).
(2) A company is connected with another company if—
(a) the same person has control of both companies,
(b) a person (“A”) has control of one company and persons connected with A have control of the other company,
(c) A has control of one company and A together with persons connected with A have control of the other company, or
(d) a group of two or more persons has control of both companies and the groups either consist of the same persons or could be so regarded if (in one or more cases) a member of either group were replaced by a person with whom the member is connected.
(3) A company is connected with another person (“A”) if—
(a) A has control of the company, or
(b) A together with persons connected with A have control of the company.
(4) In relation to a company, any two or more persons acting together to secure or exercise control of the company are connected with—
(a) one another, and
(b) any person acting on the directions of any of them to secure or exercise control of the company.
(5) An individual (“A”) is connected with another individual (“B”) if—
(a) A is B's spouse or civil partner,
(b) A is a relative of B,
(c) A is the spouse or civil partner of a relative of B,
(d) A is a relative of B's spouse or civil partner, or
(e) A is the spouse or civil partner of a relative of B's spouse or civil partner.
(6) A person, in the capacity as trustee of a settlement, is connected with—
(a) any individual who is a settlor in relation to the settlement,
(b) any person connected with such an individual,
(c) any close company whose participators include the trustees of the settlement,
(d) any non-UK resident company which, if it were UK resident, would be a close company whose participators include the trustees of the settlement,
(e) any body corporate controlled (within the meaning of section 1124) by a company within paragraph (c) or (d),
(f) if the settlement is the principal settlement in relation to one or more sub-fund settlements, a person in the capacity as trustee of such a sub-fund settlement, and
(g) if the settlement is a sub-fund settlement in relation to a principal settlement, a person in the capacity as trustee of any other sub-fund settlements in relation to the principal settlement.
(7) A person who is a partner in a partnership is connected with—
(a) any partner in the partnership,
(b) the spouse or civil partner of any individual who is a partner in the partnership, and
(c) a relative of any individual who is a partner in the partnership.
(8) But subsection (7) does not apply in relation to acquisitions or disposals of assets of the partnership pursuant to genuine commercial arrangements.
(1) In section 1122 and this section—
“company” includes any body corporate or unincorporated association, but does not include a partnership (and see also subsection (2)),
“control” is to be read in accordance with sections 450 and 451 (except where otherwise indicated),
“principal settlement” has the meaning given by paragraph 1 of Schedule 4ZA to TCGA 1992,
“relative” means brother, sister, ancestor or lineal descendant,
“settlement” has the same meaning as in Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act), and
“sub-fund settlement” has the meaning given by paragraph 1 of Schedule 4ZA to TCGA 1992.
(2) For the purposes of section 1122—
(a) a unit trust scheme is treated as if it were a company, and
(b) the rights of the unit holders are treated as if they were shares in the company.
(3) For the purposes of section 1122 “trustee”, in the case of a settlement in relation to which there would be no trustees apart from this subsection, means any person—
(a) in whom the property comprised in the settlement is for the time being vested, or
(b) in whom the management of that property is for the time being vested.
Section 466(4) of ITA 2007 (which applies for the purposes of the Corporation Tax Acts as a result of section 1169 below) does not apply for the purposes of this subsection.
(4) If any provision of section 1122 provides that a person (“A”) is connected with another person (“B”), it also follows that B is connected with A.
(1) This section has effect for the purposes of the provisions of the Corporation Tax Acts which apply this section (or to which this section is applied).
(2) In relation to a body corporate (“company A”), “control” means the power of a person (“P”) to secure—
(a) by means of the holding of shares or the possession of voting power in relation to that or any other body corporate, or
(b) as a result of any powers conferred by the articles of association or other document regulating that or any other body corporate,
that the affairs of company A are conducted in accordance with P's wishes.
(3) In relation to a partnership, “control” means the right to a share of more than half the assets, or of more than half the income, of the partnership.
(1) In the Corporation Tax Acts “farming” means the occupation of land wholly or mainly for the purposes of husbandry, but does not include market gardening (see subsection (5)).
(2) In subsection (1) “husbandry” includes—
(a) hop growing, and
(b) the breeding and rearing of horses and the grazing of horses in connection with those activities.
(3) For the purposes of the Corporation Tax Acts the cultivation of short rotation coppice is regarded as husbandry and not as forestry.
(4) In the Corporation Tax Acts “woodlands” does not include land on which short rotation coppice is cultivated.
(5) In the Corporation Tax Acts “market gardening” means the occupation of land as a garden or nursery for the purpose of growing produce for sale.
(6) For the purposes of this section “short rotation coppice” means a perennial crop of tree species planted at high density, the stems of which are harvested above ground level at intervals of less than 10 years.
(7) In the application of this section for the purposes of paragraph 26 of Schedule 15 to FA 2000—
(a) both references to the occupation of land, and the reference to land on which short rotation coppice is cultivated, refer to land in the United Kingdom, and
(b) the reference to the cultivation of such coppice refers to its cultivation in the United Kingdom.
1127 “Generally accepted accounting practice” and related expressions
(1) In the Corporation Tax Acts “generally accepted accounting practice” means UK generally accepted accounting practice.
This is subject to subsection (3).
(2) In the Corporation Tax Acts “UK generally accepted accounting practice”—
(a) means generally accepted accounting practice in relation to accounts of UK companies (other than IAS accounts) that are intended to give a true and fair view, and
(b) has the same meaning in relation to—
(i) individuals,
(ii) entities other than companies, and
(iii) companies that are not UK companies,
as it has in relation to UK companies.
(3) In relation to the affairs of a company or other entity that prepares IAS accounts, in the Corporation Tax Acts “generally accepted accounting practice” means generally accepted accounting practice in relation to IAS accounts.
(4) In the Corporation Tax Acts “for accounting purposes” means for the purposes of accounts drawn up in accordance with generally accepted accounting practice.
(5) In the Corporation Tax Acts “international accounting standards” has the same meaning as in Regulation (EC) No 1606/2002 of the European Parliament and the Council of 19 July 2002 on the application of international accounting standards.
(6) If an international accounting standard has been adopted by the United Kingdom or the European Commission with modifications, then as regards matters covered by that standard—
(a) generally accepted accounting practice with respect to IAS accounts is to be regarded as permitting the use of the standard either with or without modifications, and
(b) accounts prepared on either basis are to be regarded for the purposes of the Corporation Tax Acts as prepared in accordance with international accounting standards.
(7) In this section—
“adopted by the United Kingdom” means adopted for use within the United Kingdom by virtue of Chapter 2 or 3 of Part 2 of the International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019,
“adopted by the European Commission” means adopted by the European Commission in accordance with Regulation (EC) No 1606/2002 of the European Parliament and the Council of 19 July 2002 on the application of international accounting standards (as it has effect in EU law),
“IAS accounts” means accounts prepared in accordance with international accounting standards, and
“UK companies” means companies incorporated or formed under the law of a part of the United Kingdom.
(1) In the Corporation Tax Acts references to grossing up by reference to a rate of tax are to calculating the amount (“the grossed up amount”) which after deduction of income tax at that rate would equal the amount to be grossed up (“the net amount”).
(2) The grossed up amount is the sum of the net amount and the tax deducted.
(3) The grossed up amount may also be expressed as—
GA
=
NA
+
(
NA
×
R
100
-
R
)
where—
GA is the grossed up amount,
NA is the net amount, and
R is the percentage rate of tax by reference to which the net amount is to be grossed up.
(1) This section has effect for the purposes of the provisions of the Corporation Tax Acts which apply this section.
(2) A hire-purchase agreement is an agreement in whose case conditions A, B and C are met.
(3) Condition A is that under the agreement goods are bailed (or in Scotland hired) in return for periodical payments by the person to whom they are bailed (or hired).
(4) Condition B is that under the agreement the property in the goods will pass to the person to whom they are bailed (or hired) if the terms of the agreement are complied with and one or more of the following events occurs—
(a) the exercise of an option to purchase by that person,
(b) the doing of another specified act by any party to the agreement,
(c) the happening of another specified event.
(5) Condition C is that the agreement is not a conditional sale agreement.
(6) In subsection (5) “conditional sale agreement” means an agreement for the sale of goods under which—
(a) the purchase price or part of it is payable by instalments, and
(b) the property in the goods is to remain in the seller (even though they are to be in the possession of the buyer) until conditions specified in the agreement are met (whether as to the payment of instalments or otherwise).
(1) In the Corporation Tax Acts “local authority”, in relation to England and Wales, means—
(a) a billing authority as defined in section 1(2) of the Local Government Finance Act 1992,
(b) a precepting authority as defined in section 69(1) of that Act,
(c) a body with power to issue a levy (by virtue of regulations under section 74 of the Local Government Finance Act 1988),
(d) a body with power to issue a special levy (by virtue of regulations under section 75 of that Act),
(e) a fire and rescue authority in Wales constituted by a scheme under section 2 of the Fire and Rescue Services Act 2004 or a scheme to which section 4 of that Act applies,
(ea) a corporate joint committee established by regulations under Part 5 of the Local Government and Elections (Wales) Act 2021 (asc 1),
(f) an authority with power to make or determine a rate, or
(g) a residuary body established by order under section 22(1) of the Local Government Act 1992.
(2) In the Corporation Tax Acts “local authority”, in relation to Scotland, means—
(a) a council constituted under section 2 of the Local Government etc (Scotland) Act 1994,
(b) a joint board or committee within the meaning of the Local Government (Scotland) Act 1973, or
(c) an authority with power to requisition any sum from a council such as is mentioned in paragraph (a).
(3) In the Corporation Tax Acts “local authority”, in relation to Northern Ireland, means a district council constituted under section 1 of the Local Government Act (Northern Ireland) 1972 (c. 9 (N.I.)).
(4) In this section “rate” means a rate—
(a) whose proceeds are applicable for public local purposes, and
(b) which is leviable by reference to the value of land or property.
(1) In the Corporation Tax Acts “local authority association” means any incorporated or unincorporated association which meets conditions A and B.
(2) Condition A is that all of its members are local authorities, groups of local authorities or local authority associations.
(3) Condition B is that its purpose, or primary purpose, is to protect and further the general interests of local authorities or any description of local authorities.
(4) For the purposes of condition A, if a member (“M”) of a local authority association is a representative of, or is appointed by, a local authority, group of local authorities or a local authority association, the authority, group or association concerned (rather than M) is to be treated as a constituent member of the local authority association.
(1) In the Corporation Tax Acts “offshore installation” means a structure which is, is to be, or has been, put to a relevant use while in water (see subsections (3) and (4)).
(2) But a structure is not an offshore installation if—
(a) it has permanently ceased to be put to a relevant use,
(b) it is not, and is not to be, put to any other relevant use, and
(c) since permanently ceasing to be put to a relevant use, it has been put to a use which is not relevant.
(3) A use is a relevant use if it is—
(a) for the purposes of exploiting mineral resources by means of a well,
(b) for the purposes of exploration with a view to exploiting mineral resources by means of a well,
(c) for the storage of gas in or under the shore or the bed of any waters,
(d) for the recovery of gas so stored,
(e) for the conveyance of things by means of a pipe, or
(f) mainly for the provision of accommodation for individuals who work on or from a structure which is, is to be, or has been, put to any of the above uses while in water.
(4) For the purposes of this section references to a structure being put to a use while in water are to the structure being put to a use while—
(a) standing in any waters,
(b) stationed (by whatever means) in any waters, or
(c) standing on the foreshore or other land intermittently covered with water.
(5) In this section “structure” includes a ship or other vessel.
1133 Regulations about the meaning of “offshore installation”
(1) The Treasury may by regulations make provision as to the meaning of “offshore installation” in the Corporation Tax Acts.
(2) The regulations may—
(a) add to, amend or repeal any provision of section 1132,
(b) make different provision for different purposes, and
(c) contain incidental, supplemental, consequential and transitional provision and savings.
(1) In the Corporation Tax Acts “oil and gas exploration and appraisal” means activities carried out for the purpose of—
(a) searching for petroleum anywhere in an area,
(b) ascertaining a petroleum-bearing area's extent or characteristics, or
(c) ascertaining its reserves of petroleum,
so that it may be determined whether the petroleum is suitable for commercial exploitation.
(2) In this section “petroleum” has the meaning given by section 1 of the Petroleum Act 1998.
(1) In the Corporation Tax Acts “property investment LLP” means a limited liability partnership—
(a) whose business consists wholly or mainly in the making of investments in land, and
(b) the principal part of whose income is derived from investments in land.
(2) Whether a limited liability partnership is a property investment LLP is determined for each period of account of the partnership.
(1) In the Corporation Tax Acts “recognised stock exchange” means—
(a) any market of a recognised investment exchange which is for the time being designated as a recognised stock exchange for the purposes of section 1005 of ITA 2007 by an order made by the Commissioners for Her Majesty's Revenue and Customs, and
(b) any market outside the United Kingdom which is for the time being so designated.
(2) References in the Corporation Tax Acts to securities which are listed on a recognised stock exchange are to securities—
(a) which are admitted to trading on that exchange, and
(b) which are included in the official UK list or are officially listed in a qualifying country outside the United Kingdom in accordance with provisions corresponding to those generally applicable in EEA states.
(3) For this purpose “qualifying country outside the United Kingdom” means any country outside the United Kingdom in which there is a recognised stock exchange.
(4) References in the Corporation Tax Acts to securities which are included in the official UK list are to securities which are included in the official list (within the meaning of Part 6 of FISMA 2000) in accordance with the provisions of that Part.
(5) In this section—
“recognised investment exchange” has the same meaning as in FISMA 2000 (see section 285 of that Act), and
“securities” includes shares and stock.
(1) This section has effect for the purposes of the provisions of the Corporation Tax Acts which apply this section.
(2) “Research and development” means activities that fall to be treated as research and development in accordance with generally accepted accounting practice.
This is subject to subsections (3) and (4).
(3) Activities that are “research and development” for the purposes of section 1006 of ITA 2007 as a result of regulations under that section are “research and development” for the purposes of this section.
(4) Activities that are not “research and development” for the purposes of section 1006 of ITA 2007 as a result of regulations under that section are not “research and development” for the purposes of this section.
(5) Unless otherwise expressly provided, “research and development” does not include oil and gas exploration and appraisal.