357NH Payments and receipts in respect of intangible assets
(1) No deduction is allowed in calculating the profits attributable to the company's NIRE for royalties paid, or other similar payments made, by the NIRE to any other part of the company in respect of the use of intangible assets held by the company.
(2) But a deduction is allowed in calculating the profits attributable to the NIRE for any contribution by the NIRE to the costs of creation of an intangible asset.
(3) No receipt is to be brought into account in calculating the profits attributable to the NIRE for royalties or other similar amounts received from any other part of the company in respect of the use of intangible assets held by the company for the purposes of the NIRE.
(4) But a receipt is to be brought into account in calculating profits attributable to the NIRE for any contribution received by the NIRE in respect of the costs of creation of an intangible asset.
(5) In this section “intangible asset”—
(a) includes any intellectual property (as defined in section 712(3) of CTA 2009), and
(b) subject to that, has the meaning it has for accounting purposes.
357NI Interest or other financing costs and receipts
(1) No deduction is allowed in calculating the profits attributable to the company's NIRE for payments of interest or other financing costs by the NIRE to any other part of the company.
(2) No receipt is to be brought into account in calculating profits attributable to the NIRE for interest or other financing income received from any other part of the company.
In this Part, except so far as the context otherwise requires—
(a) references to a trade include an office, and
(b) references to carrying on a trade including holding an office.
(1) This Chapter makes provision about amounts which are treated by section 747 of CTA 2009 (intangible fixed assets held for purposes of trade) as receipts or expenses of a trade carried on by a Northern Ireland company.
(2) In this Chapter “intangible fixed asset” has the same meaning as in Part 8 of CTA 2009 (see section 713 of that Act).
357OA Rules affecting calculation of Northern Ireland profits or losses
(1) If a company is a Northern Ireland company in an accounting period, this section applies to the debits and credits that are given effect under section 747 of CTA 2009 (intangible fixed assets held for purposes of trade) as receipts or expenses of the company's trade in calculating the profits of the trade.
(2) The Northern Ireland intangibles credits and Northern Ireland intangibles debits form part of the Northern Ireland profits or Northern Ireland losses of the trade.
(3) Any other credits or debits to which this section applies form part of the mainstream profits or mainstream losses of the trade.
(4) For the meaning of “Northern Ireland intangibles credits”, see section 357OB(2)(a) and (3) and 357OC(2).
(5) For the meaning of “Northern Ireland intangibles debits”, see section 357OB(2)(b) and (4) and 357OC(3).
357OB Northern Ireland intangibles credits and debits: SMEs that are Northern Ireland employers
(1) This section applies to a company that—
(a) is a Northern Ireland company in an accounting period by virtue of the SME (Northern Ireland employer) condition in section 357KA, and
(b) carries on a trade which is a qualifying trade by virtue of section 357KB(1) (trade other than excluded trade).
(2) If the company does not carry on an excluded activity—
(a) the Northern Ireland intangibles credits for the accounting period are—
(i) the credits treated by section 747(2) of CTA 2009 as receipts of the qualifying trade for the period, except credits in respect of pre-commencement assets and realisation credits, and
(ii) the Northern Ireland element of each realisation credit for the period, and
(b) the Northern Ireland intangibles debits for the accounting period are—
(i) the debits treated by section 747(3) of CTA 2009 as expenses of the qualifying trade for the period, except debits in respect of pre-commencement assets and realisation debits, and
(ii) the Northern Ireland element of each realisation debit for the period.
(3) If the company carries on an excluded activity, the Northern Ireland intangibles credits for the accounting period are—
(a) the credits treated by section 747(2) of CTA 2009 as receipts of the qualifying trade for the period, to the extent that—
(i) they are neither credits in respect of pre-commencement assets nor realisation credits, and
(ii) they are not attributable to assets held for the purposes of the excluded activity, and
(b) the Northern Ireland element of each realisation credit for the period.
(4) If the company carries on an excluded activity, the Northern Ireland intangibles debits for the accounting period are—
(a) the debits treated by section 747(3) of CTA 2009 as expenses of the qualifying trade for the period, to the extent that—
(i) they are neither debits in respect of pre-commencement assets nor realisation debits, and
(ii) they are not attributable to assets held for the purposes of the excluded activity, and
(b) the Northern Ireland element of each realisation debit for the period.
(5) For the meaning of “pre-commencement asset”, see section 357OH.
(6) For the meaning of a “realisation credit” and “realisation debit” and of the “Northern Ireland element” of either, see sections 357OD and 357OE.
357OC Northern Ireland intangibles credits and debits: SMEs that are not Northern Ireland employers and large companies
(1) This section applies to a company that is a Northern Ireland company in an accounting period by virtue of the SME (election) condition or the large company condition in section 357KA.
(2) The Northern Ireland intangibles credits for the accounting period are—
(a) the credits treated by section 747(2) of CTA 2009 as receipts of the qualifying trade for the period, to the extent that—
(i) they are neither credits in respect of pre-commencement assets nor realisation credits,
(ii) they are not attributable to assets held for the purposes of an excluded activity, and
(iii) they would in accordance with the separate enterprise principle in section 357NC be attributed to the company's NIRE, and
(b) the Northern Ireland element of each realisation credit for the period.
(3) The Northern Ireland intangibles debits for the accounting period are—
(a) the debits treated by section 747(3) of CTA 2009 as expenses of the qualifying trade for the period, to the extent that—
(i) they are neither debits in respect of pre-commencement assets nor realisation debits,
(ii) they are not attributable to assets held for the purposes of an excluded activity, and
(iii) they would in accordance with the separate enterprise principle in section 357NC be attributed to the company's NIRE, and
(b) the Northern Ireland element of each realisation debit for the period.
(4) For the meaning of “pre-commencement asset”, see section 357OH.
(5) For the meaning of a “realisation credit” and “realisation debit” and of the “Northern Ireland element” of either, see sections 357OD and 357OE.
357OD “Realisation credit” and “realisation debit”
In this Chapter, a “realisation credit” or “realisation debit”, in relation to a trade carried on by a company in an accounting period, means a credit or debit which—
(a) is brought into account by the company under Part 8 of CTA 2009 for the period as a result of Chapter 4 of that Part (realisation of intangible fixed assets),
(b) is treated under section 747 of that Act as a receipt or expense of the trade, and
(c) does not relate to a pre-commencement asset.
357OE The Northern Ireland element of a realisation credit or debit
(1) This section has effect for the purposes of this Chapter.
(2) A realisation credit or realisation debit can have a “Northern Ireland element” only if—
(a) the intangible fixed asset to which it relates has been held by the company, in an accounting period in which it was a Northern Ireland company, wholly or partly for the purposes of a qualifying trade carried on by the company, except so far as the trade consists of an excluded activity, or
(b) in the case of a realisation credit, roll-over relief was previously given in respect of an asset which was so held.
(3) The “Northern Ireland element” of a realisation credit or realisation debit is determined in accordance with section 357OF or 357OG.
(4) “Roll-over relief” means relief under Chapter 7 of Part 8 of CTA 2009 (roll-over relief in case of realisation and reinvestment).
(1) If a realisation credit or realisation debit arises under section 735 of CTA 2009 (asset written down for tax purposes), its Northern Ireland element is determined by the formula—
A×NIC−TWDV
where—
A is the amount of the realisation credit or realisation debit;
NI is the total net Northern Ireland debits (see subsection (2));
C is the cost of the asset recognised for tax purposes, as defined by section 742(2) or 743(2) of CTA 2009;
TWDV is the tax written-down value of the asset within the meaning of Part 8 of CTA 2009 (see Chapter 5 of that Part).
(2) In subsection (1) “the total net Northern Ireland debits” means—
(a) in a case within section 742 of CTA 2009, the total debits previously brought into account for tax purposes under Part 8 of CTA 2009 in respect of the asset so far as they were Northern Ireland intangibles debits for the purposes of this Chapter, less the total credits previously so brought into account for tax purposes so far as they were Northern Ireland intangibles credits for the purposes of this Chapter, or
(b) in a case within section 743 of CTA 2009, the total debits previously brought into account for tax purposes under Part 8 of CTA 2009 in respect of the asset so far as they were Northern Ireland intangibles debits for the purposes of this Chapter.
(3) Subsection (4) applies if—
(a) a realisation credit or realisation debit arises under section 736 of CTA 2009 (asset shown in balance sheet and not written down for tax purposes), or
(b) a realisation credit arises under section 738 of CTA 2009 (asset not shown in balance sheet).
(4) The Northern Ireland element of the realisation credit or realisation debit is such proportion of the realisation credit or realisation debit as can on a just and reasonable basis be attributed to the holding of the asset for the purposes of the relevant Northern Ireland trade.
(5) This section does not apply to a realisation credit if section 357OG (cases involving roll-over relief) applies.
(6) In this section “the relevant Northern Ireland trade” means the qualifying trade carried on by the company in an accounting period in which it was a Northern Ireland company, except so far as the trade consists of an excluded activity.
357OG Northern Ireland element: credits where roll-over relief involved
(1) This section applies if a realisation credit relates to an asset (“the new asset”) whose cost recognised for tax purposes is reduced as a result of roll-over relief previously given on the realisation of another asset (“the old asset”).
(2) To calculate the Northern Ireland element of the realisation credit on the realisation of the new asset, take the following steps—
Step 1 Calculate the part (if any) of the realisation credit that is attributable to the total net debits in respect of the new asset.
Step 2 Calculate the Northern Ireland element of the result of Step 1 by applying to it the proportion that the total net Northern Ireland debits bears to the total net debits.
Step 3 If the realisation credit exceeds the total net debits, calculate any part of the excess that is attributable to the reduction in the cost of the new asset recognised for tax purposes that resulted from the roll-over relief.
Step 4 If, in the absence of roll-over relief, a proportion of the realisation credit on the realisation of the old asset would in accordance with section 357OF have been a Northern Ireland element, calculate the Northern Ireland element of the result of Step 3 by applying that proportion to it.
Step 5 If any remaining amount of the realisation credit has not been attributed under Step 1 or 3, calculate the Northern Ireland element of that remaining amount by determining how much of that remaining amount can on a just and reasonable basis be attributed to the holding of the new asset for the purposes of the relevant Northern Ireland trade.
(3) The Northern Ireland element of the realisation credit is the total of the Northern Ireland elements calculated at Steps 2, 4 and 5.
(4) In this section—
“the relevant Northern Ireland trade” means the qualifying trade carried on by the company in an accounting period in which it was a Northern Ireland company, except so far as the trade consists of an excluded activity;
“the total net debits” means—
in a case within section 742 of CTA 2009, the total debits previously brought into account for tax purposes under Part 8 of CTA 2009 in respect of the asset, less the total credits previously so brought into account (if any), or
in a case within section 743 of CTA 2009, the total debits previously brought into account for tax purposes under Part 8 of CTA 2009 in respect of the asset;
“the total net Northern Ireland debits” has the meaning given by section 357OF(2).
(1) An intangible fixed asset is a “pre-commencement asset” if it was created before the commencement day.
(2) “The commencement day” has the meaning given by section 5(4) of the Corporation Tax (Northern Ireland) Act 2015.
(3) Subsections (1) and (2) have effect for the purposes of this Chapter.
(4) The general rule is that intangible fixed assets are treated for the purposes of subsection (1) as having been created before the commencement day if they were held (by the company or another person) at any time before that day.
(5) The general rule is subject to the following provisions—
(a) section 357OI (goodwill);
(b) section 357OJ (assets representing production expenditure on films).
For the purposes of section 357OH(1) (pre-commencement asset), goodwill is treated as created—
(a) before the commencement day in a case in which the business in question was carried on by the company or any other person at any time before that day, and
(b) on or after the commencement day in any other case.
357OJ Assets representing production expenditure on films
(1) In determining for the purposes of section 357OH(1) (pre-commencement asset) whether an asset representing production expenditure on a film was created before the commencement day or on or after that day, the asset is treated as created when the film is completed.
(2) In this section—
(a) “completed” has the same meaning as in Part 15 of CTA 2009 (see section 1181(5) of that Act),
(b) “film” has the same meaning as in that Part (see section 1181 of that Act), and
(c) “production expenditure” has the same meaning as in that Part (see section 1184 of that Act).
(1) This section and section 357OL have effect for the purposes of this Chapter in relation to assets to which section 858 of CTA 2009 (treatment of fungible assets) applies.
(2) Section 858 of CTA 2009 applies as if—
(a) pre-commencement assets, and
(b) intangible fixed assets that are not pre-commencement assets,
were assets of different kinds.
(3) If section 858 of CTA 2009 applies (whether or not it is a case where subsection (2) has effect)—
(a) a single asset comprising pre-commencement assets is treated as itself being a pre-commencement asset, and
(b) a single asset comprising intangible fixed assets that are not pre-commencement assets is treated as itself being an asset which is not a pre-commencement asset.
357OL Realisation and acquisition of fungible assets
(1) Subsection (2) applies if—
(a) a company realises a fungible asset, and
(b) apart from section 357OK(2), the asset would be treated as part of a single asset comprising both pre-commencement assets and assets that are not pre-commencement assets.
(2) The realisation is treated as diminishing the single asset of the company comprising pre-commencement assets in priority to diminishing the single asset of the company comprising assets that are not pre-commencement assets.
(3) Fungible assets acquired by a company that would not otherwise be treated as pre-commencement assets are so treated so far as they are identified, in accordance with the following rules, with pre-commencement assets realised by the company.
(4) Rule 1 is that assets acquired are identified with pre-commencement assets of the same kind realised by the company within the period beginning 30 days before and ending 30 days after the date of the acquisition.
(5) The reference in subsection (4) to assets “of the same kind” is to assets that are, or but for section 357OK(2) would be, treated as part of a single asset because of section 858 of CTA 2009.
(6) Rule 2 is that assets realised earlier are identified before assets realised later.
(7) Rule 3 is that assets acquired earlier are identified before assets acquired later.
(8) In this section—
“fungible asset” means an intangible fixed asset to which section 858 of CTA 2009 applies;
“realisation”, in relation to a fungible asset, has the same meaning as in Part 8 of CTA 2009 (see sections 734 and 856 of that Act).
357OM Assets whose value derives from pre-commencement assets
(1) This section applies if—
(a) on or after the commencement day a company (“the acquiring company”) acquires an intangible fixed asset (“the acquired asset”) from a person (“the transferor”),
(b) the acquired asset is created on or after the commencement day,
(c) the value of the acquired asset derives in whole or in part from any other asset (“the other asset”), and
(d) the other asset meets the pre-commencement status conditions.
(2) In the hands of the acquiring company the acquired asset is treated for the purposes of this Chapter as a pre-commencement asset so far as its value derives from the other asset.
(3) If only part of the value of the acquired asset derives from the other asset, this Chapter has effect as if there were separate assets representing the part that does so derive and the part that does not so derive.
(4) For the purposes of this section the cases in which the value of an asset may be derived from any other asset include any case where—
(a) assets have been merged or divided,
(b) assets have changed their nature, or
(c) rights or interests in or over assets have been created or extinguished.
(5) Section 357ON supplements this section.
(1) For the purposes of section 357OM(1) the other asset meets the pre-commencement status conditions if—
(a) it was created before the commencement day, or
(b) on or after the commencement day the other asset has been a pre-commencement asset in the hands of the transferor or any other person.
(2) Any apportionment necessary for the purposes of section 357OM(3) must be made on a just and reasonable basis.
(3) Sections 357OH(4), 357OI and 357OJ (provisions explaining when assets are treated as created) apply for the purposes of section 357OM as they apply for the purposes of section 357OH(1).
(4) Expressions used in this section have the same meaning as in section 357OM.
357OO Assets acquired in connection with disposals of pre-commencement assets
(1) This section applies if—
(a) a person disposes of an asset which—
(i) in the case of an intangible fixed asset, is a pre-commencement asset, or
(ii) in the case of any other asset, was created before the commencement day, and
(b) a company acquires an intangible fixed asset directly or indirectly in consequence of the disposal or otherwise in connection with it.
(2) The acquired asset is treated for the purposes of this Chapter as a pre-commencement asset in the company's hands.
(3) For the purposes of this section a person “disposes of” an asset if—
(a) for the purposes of TCGA 1992, the person makes a part disposal of the asset or any other disposal of it,
(b) in the case of an intangible fixed asset, there is for the purposes of Part 8 of CTA 2009 a realisation of the asset, or
(c) the person grants a licence in respect of the asset.
(4) For the purposes of this section it does not matter whether—
(a) the asset that the person disposes of is the same asset as the acquired asset,
(b) the acquired asset is acquired at the time of the disposal, or
(c) the acquired asset is acquired by merging assets or otherwise.
In this Chapter—
“the commencement day” has the meaning given by section 357OH(2);
“the Northern Ireland element”, in relation to a realisation credit or realisation debit, is to be read in accordance with section 357OE;
“Northern Ireland intangibles credits” means credits brought into account under Part 8 of CTA 2009 that are in accordance with section 357OB(2)(a) or (3) or section 357OC(2) Northern Ireland intangibles credits;
“Northern Ireland intangibles debits” means debits brought into account under Part 8 of CTA 2009 that are in accordance with section 357OB(2)(b) or (4) or section 357OC(3) Northern Ireland intangibles debits;
“pre-commencement asset” has the meaning given by section 357OH;
“realisation credit” and “realisation debit” are to be read in accordance with section 357OD;
“roll-over relief” has the meaning given by section 357OE.
(1) This Chapter makes provision about the operation of—
(a) Chapter 1A of Part 13 (R&D expenditure credit), and
(b) Chapter 2 of that Part (relief for loss-making, R&D-intensive SMEs).
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
in relation to expenditure incurred by a company in an accounting period in which it is a Northern Ireland company.
(2) In this Chapter—
(a) “Northern Ireland expenditure” means expenditure incurred in a trade to the extent that the expenditure forms part of the Northern Ireland profits or Northern Ireland losses of the trade;
(b) “qualifying Chapter 2 expenditure” has the same meaning as in Part 13 of CTA 2009 (see section 1051 of that Act);
(c) “Northern Ireland qualifying Chapter 2 expenditure” means so much of any qualifying Chapter 2 expenditure as forms part of the Northern Ireland profits or Northern Ireland losses of a trade;
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) This section applies where—
(a) a company is entitled to an R&D expenditure credit under Chapter 1A of Part 13 of CTA 2009 (R&D expenditure credits) for an accounting period in relation to a qualifying trade, and
(b) the company is a Northern Ireland company in the period.
(2) The R&D expenditure credit forms part of the mainstream profits or mainstream losses of the trade.
357PB Additional deduction under section 1044 of CTA 2009
(1) This section applies where—
(a) a company is entitled to corporation tax relief under section 1044 of CTA 2009 (additional deduction in calculating profits of a trade) for an accounting period in relation to any qualifying Chapter 2 expenditure,
(b) the company is a Northern Ireland company in the period, and
(c) some or all of the qualifying Chapter 2 expenditure is Northern Ireland qualifying Chapter 2 expenditure.
(2) Section 1044(8) of CTA 2009 (amount of additional deduction) has effect, in relation to the Northern Ireland qualifying Chapter 2 expenditure, as if the percentage specified in that provision were the adjusted percentage.
(3) For the purposes of this section “the adjusted percentage” means—
A×MRNIR
where—
A is the percentage specified in section 1044(8) of CTA 2009;
MR is the main rate for the financial year in which the expenditure is incurred;
NIR is the Northern Ireland rate for the financial year in which the expenditure is incurred.
(4) So much of the additional deduction under section 1044 of CTA 2009 as is (by virtue of this section) calculated by reference to the adjusted percentage forms part of Northern Ireland profits or Northern Ireland losses of the trade.
357PC Tax credit under section 1054 of CTA 2009: entitlement
(1) Section 1055 of CTA 2009 (meaning of “Chapter 2 surrenderable loss”) does not apply to a company in relation to a qualifying trade it carries on in an accounting period in which it is a Northern Ireland company (and the following provisions of this section apply instead).
(2) The company has a Chapter 2 surrenderable loss in the period for the purposes of Chapter 2 of Part 13 of CTA 2009 if—
(a) it obtains an additional deduction under section 1044 of CTA 2009 in the accounting period in calculating the profits of the trade, and
(b) it has—
(i) a Northern Ireland loss of the trade in the period, or
(ii) a mainstream loss of the trade in the period.
(3) In this Chapter—
(a) “Northern Ireland Chapter 2 surrenderable loss” means a Chapter 2 surrenderable loss that a company has by virtue of subsection (2)(b)(i);
(b) “mainstream Chapter 2 surrenderable loss” means a Chapter 2 surrenderable loss that a company has by virtue of subsection (2)(b)(ii).
(4) The amount of a Northern Ireland Chapter 2 surrenderable loss is—
(a) so much of the Northern Ireland loss in question as is unrelieved, or
(b) if less, the Northern Ireland qualifying Chapter 2 expenditure in respect of which the relief was obtained, multiplied by the adjusted section 1044 percentage.
(5) The amount of a mainstream Chapter 2 surrenderable loss is—
(a) so much of the mainstream loss in question as is unrelieved, or
(b) if less, the qualifying Chapter 2 expenditure in respect of which the relief was obtained that is not Northern Ireland qualifying Chapter 2 expenditure, multiplied by the percentage specified in section 1055(2)(b) of CTA 2009.
(6) For the purposes of this section “the adjusted section 1044 percentage” means—
100+(A×MRNIR)
where—
A is percentage specified in section 1044(8) of CTA 2009;
MR is the main rate for the financial year in which the expenditure is incurred;
NIR is the Northern Ireland rate for the financial year in which the expenditure is incurred.
(7) Section 1056 of CTA 2009 (amount of trading loss which is unrelieved) applies for the purposes of this section.
(8) In the application of section 1056 of CTA 2009 by virtue of subsection (7), subsection (2)(c) of that section has effect as if the reference to any loss surrendered under Part 5 of CTA 2010 were—
(a) where the trading loss in question is a Northern Ireland loss, to any of that Northern Ireland loss surrendered under that Part;
(b) where the trading loss in question is a mainstream loss, to any of that mainstream loss surrendered under that Part.
357PD Tax credit under section 1054 of CTA 2009: amount of tax credit
(1) Section 1058(1) of CTA 2009 (amount of tax credit) does not apply to a company in relation to a qualifying trade it carries on in an accounting period in which it is a Northern Ireland company (and the following provisions of this section apply instead).
(2) The amount of the R&D tax credit to which the company is entitled for the accounting period is, where the company has a Northern Ireland Chapter 2 surrenderable loss but does not have a mainstream Chapter 2 surrenderable loss, the lesser of—
(a) the amount of the Northern Ireland Chapter 2 surrenderable loss multiplied by the relevant percentage, and
(b) the amount of the cap by reference to the company’s PAYE and NIC liabilities for the accounting period.
(2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) The amount of the R&D tax credit to which the company is entitled for the accounting period is, where the company has a mainstream Chapter 2 surrenderable loss but does not have a Northern Ireland Chapter 2 surrenderable loss, the lesser of—
(a) the amount of the mainstream Chapter 2 surrenderable loss multiplied by the percentage specified in section 1058(1)(a) of CTA 2009, and
(b) the amount of the cap by reference to the company’s PAYE and NIC liabilities for the accounting period.
(3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) The amount of the R&D tax credit to which the company is entitled for the accounting period is, where the company has both a Northern Ireland Chapter 2 surrenderable loss and a mainstream Chapter 2 surrenderable loss, the lesser of—
(a) the sum of—
(i) the amount of the Northern Ireland Chapter 2 surrenderable loss multiplied by the relevant percentage, and
(ii) the amount of the mainstream Chapter 2 surrenderable loss multiplied by the percentage specified in section 1058(1)(a) of CTA 2009, and
(b) the amount of the cap by reference to the company’s PAYE and NIC liabilities for the accounting period.
(4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) For the purposes of this section “the relevant percentage” means—
A×(100+BC)
where—
A is the percentage specified in section 1058(1)(a) of CTA 2009;
B is the percentage specified in section 1044(8) of CTA 2009;
C is the adjusted section 1044 percentage as defined by section 357PC(6).
(6) Sections 1112B to 1112E of CTA 2009 (determination of cap by reference to PAYE and NIC liabilities) apply for the purposes of subsections (2)(b), (3)(b) and (4)(b) as they apply for the purposes of section 1058(1) of CTA 2009.
357PE Restriction on losses carried forward where tax credit claimed
(1) Section 1062(2) and (3) of CTA 2009 (restriction on losses carried forward where tax credit claimed) do not apply to a company in relation to a qualifying trade it carries on in an accounting period in which it is a Northern Ireland company (and the following provisions of this section apply instead).
(2) For the purposes of section 45 of CTA 2010 (relief for trading losses against future trading profits)—
(a) if the company has a Northern Ireland loss in the accounting period, that loss is treated as reduced by the amount of the surrendered Northern Ireland loss for the period, and
(b) if the company has a mainstream loss in the accounting period, that loss is treated as reduced by the amount of the surrendered mainstream loss for the period.
(3) For the purposes of this section—
(a) the “amount of the surrendered Northern Ireland loss” for the period means the amount of the Northern Ireland Chapter 2 surrenderable loss in respect of which the company claims an R&D tax credit for the period, and
(b) the “amount of the surrendered mainstream loss” for the period means the amount of the mainstream Chapter 2 surrenderable loss in respect of which the company claims an R&D tax credit for the period.
(1) This Chapter makes provision about the operation of Part 14 of CTA 2009 (remediation of contaminated or derelict land) in relation to expenditure incurred by a company in an accounting period in which it is a Northern Ireland company.
(2) In this Chapter—
(a) “Northern Ireland expenditure” means expenditure incurred in a trade to the extent that the expenditure forms part of the Northern Ireland profits or Northern Ireland losses of the trade;
(b) “qualifying land remediation expenditure” has the same meaning as in Part 14 of CTA 2009 (see section 1144 of that Act);
(c) “Northern Ireland qualifying land remediation expenditure” means so much of any qualifying land remediation expenditure as forms part of the Northern Ireland profits or Northern Ireland losses of a trade.
(1) This section applies where—
(a) a company is entitled to corporation tax relief under section 1149 of CTA 2009 (additional deduction for qualifying land remediation expenditure) for an accounting period in relation to any qualifying land remediation expenditure,
(b) the company is a Northern Ireland company in the period, and
(c) some or all of the qualifying land remediation expenditure is Northern Ireland qualifying land remediation expenditure.
(2) Section 1149(8) of CTA 2009 (amount of additional deduction) has effect, in relation to the Northern Ireland qualifying land remediation expenditure, as if the percentage specified in that provision were the adjusted percentage.
(3) For the purposes of this section “the adjusted percentage” means—
A×MRNIR
where—
A is the percentage specified in section 1149(8) of CTA 2009;
MR is the main rate for the financial year in which the expenditure is incurred;
NIR is the Northern Ireland rate for the financial year in which the expenditure is incurred.
(4) So much of the additional deduction under section 1149 of CTA 2009 as is (by virtue of this section) calculated by reference to the adjusted percentage forms part of the Northern Ireland profits or Northern Ireland losses of the trade.
(1) Section 1152 of CTA 2009 (meaning of “qualifying land remediation loss”) does not apply to a company in relation to a qualifying trade it carries on in an accounting period in which it is a Northern Ireland company (and the following provisions of this section apply instead).
(2) The company has a qualifying land remediation loss in the period for the purposes of Chapter 3 of Part 14 of CTA 2009 if—
(a) it obtains an additional deduction under section 1149 of CTA 2009 in the accounting period in calculating the profits of the trade, and
(b) it has—
(i) a Northern Ireland loss of the trade in the period, or
(ii) a mainstream loss of the trade in the period.
(3) In this Chapter—
(a) “Northern Ireland qualifying land remediation loss” means a qualifying land remediation loss that a company has by virtue of subsection (2)(b)(i);
(b) “mainstream qualifying land remediation loss” means a qualifying land remediation loss that a company has by virtue of subsection (2)(b)(ii).
(4) The amount of a Northern Ireland qualifying land remediation loss is—
(a) so much of the Northern Ireland loss in question as is unrelieved, or
(b) if less, the Northern Ireland qualifying land remediation expenditure in respect of which the relief was obtained, multiplied by the adjusted section 1152 percentage.
(5) The amount of a mainstream qualifying land remediation loss is—
(a) so much of the mainstream loss in question as is unrelieved, or
(b) if less, the qualifying land remediation expenditure in respect of which the relief was obtained that is not Northern Ireland qualifying land remediation expenditure, multiplied by the percentage specified in section 1152(2)(b) of CTA 2009.
(6) For the purposes of this section “the adjusted section 1152 percentage” means—
100+(A×MRNIR)
where—
A is percentage specified in section 1149(8) of CTA 2009;
MR is the main rate for the financial year in which the expenditure is incurred;
NIR is the Northern Ireland rate for the financial year in which the expenditure is incurred.
(7) Section 1153 of CTA 2009 (amount of trading loss which is unrelieved) applies for the purposes of this section.
(8) In the application of section 1153 of CTA 2009 by virtue of subsection (7), subsection (1)(c) of that section has effect as if the reference to any loss surrendered under Part 5 of CTA 2010 were—
(a) where the trading loss in question is a Northern Ireland loss, to any of that Northern Ireland loss surrendered under that Part;
(b) where the trading loss in question is a mainstream loss, to any of that mainstream loss surrendered under that Part.
(1) Section 1154(1) of CTA 2009 (amount of tax credit) does not apply to a company in relation to a qualifying trade it carries on in an accounting period in which it is a Northern Ireland company (and the following provisions of this section apply instead).
(2) The amount of the land remediation tax credit to which the company is entitled for the accounting period is, where the company—
(a) has a Northern Ireland qualifying land remediation loss, but
(b) does not have a mainstream qualifying land remediation loss,
the amount of the loss mentioned in paragraph (a) multiplied by the relevant percentage.
(3) The amount of the land remediation tax credit to which the company is entitled for the accounting period is, where the company—
(a) has a mainstream qualifying land remediation loss, but
(b) does not have a Northern Ireland qualifying land remediation loss,
the amount of the loss mentioned in paragraph (a) multiplied by the percentage specified in section 1154(1) of CTA 2009.
(4) The amount of the land remediation tax credit to which the company is entitled for the accounting period is, where the company has both a Northern Ireland qualifying land remediation loss and a mainstream qualifying land remediation loss, the sum of—
(a) the amount of the Northern Ireland qualifying land remediation loss multiplied by the relevant percentage, and
(b) the amount of the mainstream qualifying land remediation loss multiplied by the percentage specified in section 1154(1) of CTA 2009.
(5) For the purposes of this section “the relevant percentage” means—
A×(100+BC)
where—
A is the percentage specified in section 1154(1) of CTA 2009;
B is the percentage specified in section 1149(8) of CTA 2009;
C is the adjusted section 1152 percentage as defined by section 357QB(6).
357QD Restriction on losses carried forward where tax credit claimed
(1) In section 1158 of CTA 2009 (restriction on losses carried forward where tax credit claimed), subsection (2) and subsection (5) so far as applying for the purposes of subsection (2) do not apply to a company in relation to a qualifying trade it carries on in an accounting period in which it is a Northern Ireland company (and the following provisions of this section apply instead).
(2) If the company in the accounting period—
(a) claims a land remediation tax credit to which it is entitled, and
(b) has a Northern Ireland loss,
that loss is treated for the purposes of section 45 of CTA 2010 (relief for trading losses against future trading profits) as reduced by the amount of the surrendered Northern Ireland loss for the period.
(3) If the company in the accounting period—
(a) claims a land remediation tax credit to which it is entitled, and
(b) has a mainstream loss,
that loss is treated for the purposes of section 45 of CTA 2010 as reduced by the amount of the surrendered mainstream loss for the period.
(4) For the purposes of this section—
(a) the “amount of the surrendered Northern Ireland loss” for the period means the amount of the Northern Ireland qualifying land remediation loss in respect of which the company claims a tax credit for the period, and
(b) the “amount of the surrendered mainstream loss” for the period means the amount of the mainstream qualifying land remediation loss in respect of which the company claims a tax credit for the period.
(1) This Chapter makes provision about the interaction between this Part and Part 14A of CTA 2009 (films, television programmes and video games).
(2) This Chapter applies if—
(a) a company is a Northern Ireland company in an accounting period,
(b) the company is treated under Part 14A of CTA 2009 as carrying on a separate trade in that period (see 1179B of that Act), and
(c) that trade is a qualifying trade.
(3) References in this Chapter to “the Northern Ireland company”, “the accounting period” and “the separate trade” are to be read accordingly.
357QF Expenditure credit to count towards mainstream profits or losses
(1) Subsection (2) applies if, under section 1179CB of CTA 2009 (expenditure credit under Part 14A of CTA 2009 to be taxable receipt), the Northern Ireland company brings an amount of audiovisual expenditure credit or video game expenditure credit into account in calculating the profits of the separate trade for the accounting period.
(2) The amount is to form part of the mainstream profits or mainstream losses of the trade for that period.
(1) If the accounting period is a pre-completion period within the meaning of section 1179BF of CTA 2009 (carrying forward of production losses in separate trade), that section applies in relation to the separate trade and that accounting period subject to the following provisions.
(2) In subsection (1) of that section, the reference to a loss is to be read as a reference to—
(a) any Northern Ireland losses, or
(b) any mainstream losses;
and the rest of that section is to be read accordingly.
(3) Subsection (4) applies if the Northern Ireland company has in the accounting period—
(a) both Northern Ireland losses of the separate trade and mainstream profits of that trade, or
(b) both mainstream losses of the separate trade and Northern Ireland profits of that trade.
(4) The company may, despite section 1179BF(2) of CTA 2009, claim under section 37 (relief for trade losses against total profits) for—
(a) relief for those Northern Ireland losses against those mainstream profits, or
(b) relief for those mainstream losses against those Northern Ireland profits.
(1) Subsection (2) applies if—
(a) the Northern Ireland company ceases to carry on the separate trade in the accounting period,
(b) as a result, section 1179BG of CTA 2009 (transfer of terminal loss in separate production trade to other production or group company) applies, and
(c) the amount in respect of which it applies (see subsection (1)(b) of that section) represents a Northern Ireland loss.
(2) The references to a loss in subsections (2) and (3)(b) of that section are to be read as references to a Northern Ireland loss.
(1) This Chapter makes provision about the operation of Part 15 of CTA 2009 (film tax relief) in relation to expenditure incurred by a company in an accounting period in which it is a Northern Ireland company.
(2) In this Chapter—
(a) “Northern Ireland expenditure” means expenditure incurred in a trade to the extent that the expenditure forms part of the Northern Ireland profits or Northern Ireland losses of the trade;
(b) “the separate film trade” has the same meaning as in Chapter 3 of Part 15 of CTA 2009 (see section 1195(5) of that Act);
(c) “qualifying expenditure” has the same meaning as in that Chapter (see section 1199(3) of that Act).
(3) References in Part 15 of CTA 2009 to “film tax relief” include relief under this Chapter.
(1) In this Chapter “a Northern Ireland additional deduction” means so much of a deduction under section 1199 of CTA 2009 (additional deduction for qualifying expenditure) as is calculated by reference to qualifying expenditure that is Northern Ireland expenditure.
(2) A Northern Ireland additional deduction forms part of the Northern Ireland profits or Northern Ireland losses of the separate film trade.
(1) This section applies where—
(a) a company is entitled under section 1199 of CTA 2009 to an additional deduction in calculating the profit or loss of the separate film trade in an accounting period,
(b) the company is a Northern Ireland company in the period,
(c) the additional deduction is wholly or partly a Northern Ireland additional deduction, and
(d) any of the following conditions is met—
(i) the company does not have a surrenderable loss in the accounting period;
(ii) the company has a surrenderable loss in the accounting period, but does not make a claim under section 1201 of CTA 2009 (film tax credit claimable if company has surrenderable loss) for the period;
(iii) the company has a surrenderable loss in the accounting period and makes a claim under that section for the period, but the amount of Northern Ireland losses surrendered on the claim is less than the Northern Ireland additional deduction.
(2) The company is entitled to make another deduction (“a Northern Ireland supplementary deduction”) in respect of qualifying expenditure.
(3) See section 357RC for provision about the amount of the Northern Ireland supplementary deduction.
(4) The Northern Ireland supplementary deduction—
(a) is made in calculating the profit or loss of the separate film trade, and
(b) forms part of the Northern Ireland profits or Northern Ireland losses of the separate film trade.
(5) In this section “surrenderable loss” has the meaning given by section 1201 of CTA 2009.