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Royal arms

Corporation Tax Act 2009

2009 CHAPTER 4

CONTENTS

Go to Preamble

  1. Part 1

    Introduction

    1. 1. Overview of Act

  2. Part 2

    Charge to corporation tax: basic provisions

    1. Chapter 1

      The charge to corporation tax

      1. Charge to tax on profits

        1. 2. Charge to corporation tax

        2. 3. Exclusion of charge to income tax

        3. 4. Exclusion of charge to capital gains tax

      2. General scheme of corporation tax

        1. 5. Territorial scope of charge

        2. 6. Profits accruing in fiduciary or representative capacity

        3. 7. Profits accruing under trusts

        4. 8. How tax is charged and assessed

    2. Chapter 2

      Accounting periods

      1. 9. Beginning of accounting period

      2. 10. End of accounting period

      3. 11. Companies with more than one accounting date

      4. 12. Companies being wound up

    3. Chapter 3

      Company residence

      1. 13. Overview of Chapter

      2. 14. Companies incorporated in the United Kingdom

      3. 15. Continuation of residence established under common law

      4. 16. SEs which transfer registered office to the United Kingdom

      5. 17. SCEs which transfer registered office to the United Kingdom

      6. 18. Companies treated as non-UK resident under double taxation arrangements

    4. Chapter 4

      Non-UK resident companies: chargeable profits

      1. Chargeable profits

        1. 19. Chargeable profits

        2. 20. Profits attributable to permanent establishment: introduction

      2. The separate enterprise principle

        1. 21. The separate enterprise principle

        2. 22. Transactions treated as being on arm’s length terms

        3. 23. Provision of goods or services for permanent establishment

        4. 24. Application to insurance companies

      3. The separate enterprise principle: application to non-UK resident banks

        1. 25. Non-UK resident banks: introduction

        2. 26. Transfer of financial assets

        3. 27. Loans: attribution of financial assets and profits arising

        4. 28. Borrowing: permanent establishment acting as agent or intermediary

      4. Rules about deductions

        1. 29. Allowable deductions

        2. 30. Restriction on deductions: costs

        3. 31. Restriction on deductions: payments in respect of intangible assets

        4. 32. Restriction on deductions: interest or other financing costs

    5. Chapter 5

      Supplementary

      1. 33. Trade includes office

  3. Part 3

    Trading income

    1. Chapter 1

      Introduction

      1. 34. Overview of Part

    2. Chapter 2

      Income taxed as trade profits

      1. Charge to tax on trade profits

        1. 35. Charge to tax on trade profits

      2. Trades and trade profits

        1. 36. Farming and market gardening

        2. 37. Commercial occupation of woodlands

        3. 38. Commercial occupation of land other than woodlands

        4. 39. Profits of mines, quarries and other concerns

        5. 40. Credit unions

      3. Starting and ceasing to trade

        1. 41. Effect of company starting or ceasing to be within charge to corporation tax

      4. Trading income and property income

        1. 42. Tied premises

        2. 43. Caravan sites where trade carried on

        3. 44. Surplus business accommodation

        4. 45. Payments for wayleaves

    3. Chapter 3

      Trade profits: basic rules

      1. 46. Generally accepted accounting practice

      2. 47. Losses calculated on same basis as profits

      3. 48. Receipts and expenses

      4. 49. Items treated as receipts and expenses

      5. 50. Animals kept for trade purposes

      6. 51. Relationship between rules prohibiting and allowing deductions

      7. 52. Apportionment etc of profits and losses to accounting period

    4. Chapter 4

      Trade profits: rules restricting deductions

      1. 53. Capital expenditure

      2. 54. Expenses not wholly and exclusively for trade and unconnected losses

      3. 55. Bad debts

      4. 56. Car or motor cycle hire

      5. 57. Car or motor cycle hire: supplementary

      6. 58. Hiring cars (but not motor cycles) with low CO2 emissions before 1 April 2013

      7. 59. Patent royalties

      8. 60. Expenditure on integral features

    5. Chapter 5

      Trade profits: rules allowing deductions

      1. Pre-trading expenses

        1. 61. Pre-trading expenses

      2. Tenants under taxed leases

        1. 62. Tenants under taxed leases: introduction

        2. 63. Tenants occupying land for purposes of trade treated as incurring expenses

        3. 64. Limit on deductions if tenant entitled to mineral extraction allowance

        4. 65. Tenants dealing with land as property employed for purposes of trade

        5. 66. Restrictions on section 63 expenses: lease premium receipts

        6. 67. Restrictions on section 63 expenses: lease of part of premises

      3. Renewals

        1. 68. Replacement and alteration of trade tools

      4. Payments for restrictive undertakings

        1. 69. Payments for restrictive undertakings

      5. Seconded employees

        1. 70. Employees seconded to charities and educational establishments

        2. 71. Educational establishments

      6. Contributions to agents' expenses

        1. 72. Payroll deduction schemes: contributions to agents' expenses

      7. Counselling and retraining expenses

        1. 73. Counselling and other outplacement services

        2. 74. Retraining courses

        3. 75. Retraining courses: recovery of tax

      8. Redundancy payments etc

        1. 76. Redundancy payments and approved contractual payments

        2. 77. Payments in respect of employment wholly in employer’s trade

        3. 78. Payments in respect of employment in more than one capacity

        4. 79. Additional payments

        5. 80. Application of section 79 in cases involving partnerships

        6. 81. Payments made by the Government

      9. Contributions to local enterprise organisations or urban regeneration companies

        1. 82. Contributions to local enterprise organisations or urban regeneration companies

        2. 83. Meaning of “local enterprise organisation”

        3. 84. Approval of local enterprise agencies

        4. 85. Supplementary provisions with respect to approvals

        5. 86. Meaning of “urban regeneration company”

      10. Scientific research

        1. 87. Expenses of research and development

        2. 88. Payments to research associations, universities etc

      11. Expenses connected with patents, designs and trade marks

        1. 89. Expenses connected with patents

        2. 90. Expenses connected with designs or trade marks

      12. Export Credits Guarantee Department

        1. 91. Payments to Export Credits Guarantee Department

      13. Levies under FISMA 2000

        1. 92. Levies etc under FISMA 2000

    6. Chapter 6

      Trade profits: receipts

      1. Capital receipts

        1. 93. Capital receipts

      2. Debts released

        1. 94. Debts incurred and later released

      3. Amounts received following earlier cessation

        1. 95. Acquisition of trade: receipts from transferor’s trade

      4. Reverse premiums

        1. 96. Reverse premiums

        2. 97. Excluded cases

        3. 98. Tax treatment of reverse premiums

        4. 99. Arrangements not at arm’s length

        5. 100. Connected persons and property arrangements

      5. Other receipts

        1. 101. Distribution of assets of mutual concerns

        2. 102. Industrial development grants

        3. 103. Sums recovered under insurance policies etc

        4. 104. Repayments under FISMA 2000

    7. Chapter 7

      Trade profits: gifts to charities etc

      1. Relief for certain gifts

        1. 105. Gifts of trading stock to charities etc

        2. 106. Meaning of “designated educational establishment”

        3. 107. Gifts of medical supplies and equipment

      2. Benefits associated with gifts

        1. 108. Receipt of benefits by donor or connected person

    8. Chapter 8

      Trade profits: herd basis rules

      1. Introduction

        1. 109. Election for application of herd basis rules

        2. 110. Meaning of “animal”, “herd”, “production herd” etc

        3. 111. Other interpretative provisions

      2. The herd basis rules

        1. 112. Initial cost of herd and value of herd

        2. 113. Addition of animals to herd

        3. 114. Replacement of animals in herd

        4. 115. Amount of receipt if old animal slaughtered under disease control order

        5. 116. Sale of animals from herd

        6. 117. Sale of whole or substantial part of herd

        7. 118. Acquisition of new herd begun within 5 years of sale

        8. 119. Section 118: sale for reasons outside farmer’s control

        9. 120. Replacement of part sold begun within 5 years of sale

        10. 121. Section 120: sale for reasons outside farmer’s control

      3. Elections

        1. 122. Herd basis elections

        2. 123. Five year gap in which no production herd kept

        3. 124. Slaughter under disease control order

      4. Preventing abuse of the herd basis rules

        1. 125. Preventing abuse of the herd basis rules

      5. Supplementary

        1. 126. Information if election made

        2. 127. Further assessment etc if herd basis rules apply

    9. Chapter 9

      Trade profits: other specific trades

      1. Dealers in securities etc

        1. 128. Taxation of amounts taken to reserves

        2. 129. Conversion etc of securities held as circulating capital

        3. 130. Traders receiving distributions etc

      2. Building societies

        1. 131. Incidental costs of issuing qualifying shares

      3. Industrial and provident societies

        1. 132. Dividends etc granted by industrial and provident societies

      4. Credit unions

        1. 133. Annual payments paid by a credit union

      5. Dealers in land etc

        1. 134. Purchase or sale of woodlands

        2. 135. Relief in respect of mineral royalties

        3. 136. Lease premiums etc: reduction of receipts

      6. Mineral exploration and access

        1. 137. Mineral exploration and access

      7. Companies liable to pool betting duty

        1. 138. Payments by companies liable to pool betting duty

      8. Intermediaries treated as making employment payments

        1. 139. Deduction for deemed employment payment

        2. 140. Special rules for partnerships

      9. Managed service companies

        1. 141. Deduction for deemed employment payments

      10. Waste disposal

        1. 142. Deduction for site preparation expenditure

        2. 143. Allocation of site preparation expenditure

        3. 144. Site preparation expenditure: supplementary

        4. 145. Site restoration payments

      11. Cemeteries and crematoria

        1. 146. Cemeteries and crematoria: introduction

        2. 147. Deduction for capital expenditure

        3. 148. Allocation of ancillary capital expenditure

        4. 149. Exclusion of expenditure met by subsidies

      12. Sound recordings

        1. 150. Revenue nature of expenditure

        2. 151. Allocation of expenditure

        3. 152. Interpretation of sections 150 and 151

      13. Reserves of marketing authorities etc

        1. 153. Reserves of marketing authorities and certain other statutory bodies

        2. 154. Conditions to be met by reserve fund

        3. 155. Interpretation of sections 153 and 154

    10. Chapter 10

      Trade profits: changes in trading stock

      1. Introduction

        1. 156. Meaning of “trading stock”

      2. Transfers of trading stock between trade and trader

        1. 157. Trading stock appropriated by trader

        2. 158. Trading stock supplied by trader

      3. Other disposals and acquisitions not made in the course of trade

        1. 159. Disposals not made in the course of trade

        2. 160. Acquisitions not made in the course of trade

      4. Relationship with transfer pricing rules

        1. 161. Transfer pricing rules to take precedence

    11. Chapter 11

      Trade profits: valuation of stock on cessation of trade

      1. 162. Valuation of trading stock on cessation

      2. 163. Meaning of “trading stock”

      3. 164. Basis of valuation of trading stock

      4. 165. Sale basis of valuation: sale to unconnected person

      5. 166. Sale basis of valuation: sale to connected person

      6. 167. Sale basis of valuation: election by connected persons

      7. 168. Connected persons

      8. 169. Cost to buyer of stock valued on sale basis of valuation

      9. 170. Meaning of “sale” and related expressions

      10. 171. Determination of questions

    12. Chapter 12

      Deductions from profits: unremittable amounts

      1. 172. Application of Chapter

      2. 173. Relief for unremittable amounts

      3. 174. Restrictions on relief

      4. 175. Withdrawal of relief

    13. Chapter 13

      Disposal and acquisition of know-how

      1. 176. Meaning of “know-how” etc

      2. 177. Disposal of know-how if trade continues to be carried on

      3. 178. Disposal of know-how as part of disposal of all or part of a trade

      4. 179. Seller controlled by buyer etc

    14. Chapter 14

      Adjustment on change of basis

      1. Adjustment on change of basis

        1. 180. Application of Chapter

        2. 181. Giving effect to positive and negative adjustments

        3. 182. Calculation of the adjustment

      2. Expenses previously brought into account

        1. 183. No adjustment for certain expenses previously brought into account

      3. Realising or writing off assets

        1. 184. Cases where adjustment not required until assets realised or written off

      4. Mark to market

        1. 185. Change from realisation basis to mark to market

        2. 186. Election for spreading if section 185 applies

        3. 187. Transfer of insurance business

    15. Chapter 15

      Post-cessation receipts

      1. Charge to tax on post-cessation receipts

        1. 188. Charge to tax on post-cessation receipts

        2. 189. Extent of charge to tax

      2. Meaning of “post-cessation receipts”

        1. 190. Basic meaning of “post-cessation receipt”

        2. 191. Other rules about what counts as post-cessation receipts

      3. Sums treated as post-cessation receipts

        1. 192. Debts paid after cessation

        2. 193. Debts released after cessation

        3. 194. Transfer of rights if transferee does not carry on trade

      4. Sums that are not post-cessation receipts

        1. 195. Transfer of trading stock

      5. Deductions

        1. 196. Allowable deductions

        2. 197. Further rules about allowable deductions

      6. Election to carry back

        1. 198. Election to carry back

        2. 199. Deductions already made are not displaced

        3. 200. Election given effect in accounting period in which receipt is received

    16. Chapter 16

      Priority rules

      1. 201. Provisions which must be given priority over this Part

  4. Part 4

    Property income

    1. Chapter 1

      Introduction

      1. 202. Overview of Part

    2. Chapter 2

      Property businesses

      1. Introduction

        1. 203. Overview of Chapter

        2. 204. Meaning of “property business”

      2. Basic meaning of UK and overseas property business

        1. 205. UK property business

        2. 206. Overseas property business

      3. Generating income from land

        1. 207. Meaning of “generating income from land”

        2. 208. Activities not for generating income from land

    3. Chapter 3

      Profits of property businesses: basic rules

      1. Charge to tax on profits of a property business

        1. 209. Charge to tax on profits of a property business

      2. Calculation of profits

        1. 210. Profits of a property business: application of trading income rules

        2. 211. Loan relationships and derivative contracts

        3. 212. Items treated as receipts and expenses

        4. 213. Certain amounts brought into account under Part 3

        5. 214. Relationship between rules prohibiting and allowing deductions

    4. Chapter 4

      Profits of property businesses: lease premiums etc

      1. Introduction

        1. 215. Overview of Chapter

        2. 216. Meaning of “short-term lease”

      2. Amounts treated as receipts: leases

        1. 217. Lease premiums

        2. 218. Amount treated as lease premium where work required

        3. 219. Sums payable instead of rent

        4. 220. Sums payable for surrender of lease

        5. 221. Sums payable for variation or waiver of terms of lease

        6. 222. Assignments for profit of lease granted at undervalue

        7. 223. Provisions supplementary to section 222

      3. Other amounts treated as receipts

        1. 224. Sales with right to reconveyance

        2. 225. Sale and leaseback transactions

        3. 226. Provisions supplementary to sections 224 and 225

      4. Additional calculation rule for reducing certain receipts

        1. 227. Circumstances in which additional calculation rule applies

        2. 228. The additional calculation rule

        3. 229. The additional calculation rule: special cases

        4. 230. Meaning of “unused amount” and “unreduced amount”

      5. Deductions in relation to certain receipts

        1. 231. Deductions for expenses under section 232

        2. 232. Tenants under taxed leases treated as incurring expenses

        3. 233. Restrictions on section 232 expenses: the additional calculation rule

        4. 234. Restrictions on section 232 expenses: lease of part of premises

      6. Limit on effect of additional calculation rule and deductions

        1. 235. Limit on reductions and deductions

      7. Certain administrative provisions

        1. 236. Payment of tax by instalments

        2. 237. Statement of accuracy for purposes of section 222

        3. 238. Claim for repayment of tax payable by virtue of section 224

        4. 239. Claim for repayment of tax payable by virtue of section 225

      8. Determinations affecting liability of more than one person

        1. 240. Appeals against proposed determinations

        2. 241. Section 240: supplementary

        3. 242. Determination by tribunal

      9. Effective duration of lease

        1. 243. Rules for determining effective duration of lease

        2. 244. Applying the rules in section 243

        3. 245. Information about effective duration of lease

      10. Other interpretative provisions

        1. 246. Provisions about premiums

        2. 247. Interpretation

    5. Chapter 5

      Profits of property businesses: other rules about receipts and deductions

      1. Furnished accommodation: receipts and deductions

        1. 248. Furnished lettings

      2. Treatment of receipts on acquisition of business

        1. 249. Acquisition of business: receipts from transferor’s UK property business

      3. Reverse premiums as receipts

        1. 250. Reverse premiums

      4. Deductions for expenditure on energy-saving items

        1. 251. Deduction for expenditure on energy-saving items

        2. 252. Restrictions on relief

        3. 253. Regulations

      5. Deductions for expenditure on sea walls

        1. 254. Deduction for expenditure on sea walls

        2. 255. Transfer of interest in premises

        3. 256. Ending of lease of premises

        4. 257. Transfer involving person within the charge to income tax

      6. Mineral royalties

        1. 258. Relief in respect of mineral royalties

      7. Apportionments on sale of land

        1. 259. Nature of item apportioned on sale of estate or interest in land

      8. Mutual business

        1. 260. Mutual business

      9. Adjustment on change of basis

        1. 261. Adjustment on change of basis

        2. 262. Giving effect to positive and negative adjustments

      10. Integral features

        1. 263. Expenditure on integral features

    6. Chapter 6

      Commercial letting of furnished holiday accommodation

      1. Introduction

        1. 264. Overview of Chapter

      2. Definition

        1. 265. Meaning of “commercial letting of furnished holiday accommodation”

        2. 266. Meaning of “relevant period” in sections 267 and 268

        3. 267. Meaning of “qualifying holiday accommodation”

        4. 268. Under-used holiday accommodation: averaging elections

      3. Separate profit calculations

        1. 269. Capital allowances and loss relief

    7. Chapter 7

      Rent receivable in connection with a UK section 39(4) concern

      1. Charge to tax on rent receivable in connection with a UK section 39(4) concern

        1. 270. Charge to tax on rent receivable in connection with a UK section 39(4) concern

        2. 271. Meaning of “rent receivable in connection with a UK section 39(4) concern”

      2. Management expenses of owner of mineral rights

        1. 272. Deduction for management expenses of owner of mineral rights

      3. Mineral royalties

        1. 273. Relief in respect of mineral royalties

        2. 274. Meaning of “mineral lease or agreement” and “mineral royalties”

        3. 275. Extended meaning of “mineral royalties” etc in Northern Ireland

        4. 276. Power to determine what counts as “mineral royalties”

    8. Chapter 8

      Rent receivable for UK electric-line wayleaves

      1. Charge to tax on rent receivable for UK electric-line wayleaves

        1. 277. Charge to tax on rent receivable for a UK electric-line wayleave

        2. 278. Meaning of “rent receivable for a UK electric-line wayleave”

        3. 279. Extent of charge to tax

    9. Chapter 9

      Post-cessation receipts

      1. Charge to tax on post-cessation receipts

        1. 280. Charge to tax on post-cessation receipts

        2. 281. Extent of charge to tax

      2. Meaning of “post-cessation receipts”

        1. 282. Basic meaning of “post-cessation receipt”

        2. 283. Other rules about what counts as a “post-cessation receipt”

        3. 284. Transfer of rights if transferee does not carry on UK property business

      3. Deductions

        1. 285. Allowable deductions

      4. Election to carry back

        1. 286. Election to carry back

    10. Chapter 10

      Supplementary

      1. Priority rules

        1. 287. Provisions which must be given priority over this Part

        2. 288. Priority between Chapters within this Part

      2. Other supplementary provisions

        1. 289. Effect of company starting or ceasing to be within charge to corporation tax

        2. 290. Overseas property businesses and overseas land: adaptation of rules

        3. 291. Meaning of “lease” and “premises”

  5. Part 5

    Loan Relationships

    1. Chapter 1

      Introduction

      1. Introduction

        1. 292. Overview of Part

        2. 293. Construction of references to profits or losses from loan relationships

        3. 294. Matters treated as loan relationships

      2. How profits and deficits from loan relationships are dealt with

        1. 295. General rule: profits arising from loan relationships chargeable as income

        2. 296. Profits and deficits to be calculated using credits and debits given by this Part

        3. 297. Trading credits and debits to be brought into account under Part 3

        4. 298. Meaning of trade and purposes of trade

        5. 299. Charge to tax on non-trading profits

        6. 300. Method of bringing non-trading deficits into account

        7. 301. Calculation of non-trading profits and deficits from loan relationships: non-trading credits and debits

    2. Chapter 2

      Basic definitions

      1. 302. “Loan relationship”, “creditor relationship”, “debtor relationship”

      2. 303. “Money debt”

      3. 304. “Related transaction”

      4. 305. Payments, interest, rights and liabilities under a loan relationship

    3. Chapter 3

      The credits and debits to be brought into account: general

      1. Introduction

        1. 306. Overview of Chapter

      2. General principles about the bringing into account of credits and debits

        1. 307. General principles about the bringing into account of credits and debits

      3. Amounts recognised in determining a company’s profit or loss

        1. 308. Amounts recognised in determining a company’s profit or loss

        2. 309. Companies without GAAP-compliant accounts

        3. 310. Power to make regulations about recognised amounts

        4. 311. Amounts not fully recognised for accounting purposes: introduction

        5. 312. Determination of credits and debits where amounts not fully recognised

      4. Accounting bases

        1. 313. Basis of accounting: “amortised cost basis”, “fair value accounting” and “fair value”

        2. 314. Power to make regulations about changes from amortised cost basis

      5. Adjustments on change of accounting policy

        1. 315. Introduction to sections 316 to 319

        2. 316. Change of accounting policy involving change of value

        3. 317. Carrying value

        4. 318. Change of accounting policy following cessation of loan relationship

        5. 319. General power to make regulations about changes in accounting policy

      6. Rules differing from generally accepted accounting practice

        1. 320. Credits and debits treated as relating to capital expenditure

        2. 321. Credits and debits recognised in equity

        3. 322. Release of debts: cases where credits not required to be brought into account

        4. 323. Meaning of expressions relating to insolvency etc

        5. 324. Restriction on debits resulting from revaluation

        6. 325. Restriction on credits resulting from reversal of disallowed debits

        7. 326. Writing off government investments

        8. 327. Disallowance of imported losses etc

      7. Exchange gains and losses

        1. 328. Exchange gains and losses

      8. Pre-loan relationship, abortive and pre-trading expenses

        1. 329. Pre-loan relationship and abortive expenses

        2. 330. Debits in respect of pre-trading expenditure

      9. Company ceasing to be party to loan relationship

        1. 331. Company ceasing to be party to loan relationship

        2. 332. Repo, stock lending and other transactions

      10. Company moving abroad

        1. 333. Company ceasing to be UK resident

        2. 334. Non-UK resident company ceasing to hold loan relationship for UK permanent establishment

    4. Chapter 4

      Continuity of treatment on transfers within groups or on reorganisations

      1. Application of this Chapter

        1. 335. Introduction to Chapter

        2. 336. Transfers of loans on group transactions

        3. 337. Transfers of loans on insurance business transfers

        4. 338. Meaning of company replacing another as party to loan relationship

        5. 339. Issues of new securities on certain cross-border reorganisations

      2. Continuity of treatment: transfer of loan at notional carrying value

        1. 340. Group transfers and transfers of insurance business: transfer at notional carrying value

        2. 341. Transferor using fair value accounting

        3. 342. Issues of new securities on reorganisations: disposal at notional carrying value

        4. 343. Receiving company using fair value accounting

      3. Transferee leaving group after replacing transferor as party to loan relationship

        1. 344. Introduction

        2. 345. Transferee leaving group otherwise than because of exempt distribution

        3. 346. Transferee leaving group because of exempt distribution

      4. Disapplication of Chapter where transferor party to avoidance

        1. 347. Disapplication of Chapter where transferor party to avoidance

    5. Chapter 5

      Connected companies relationships: introduction and general

      1. 348. Introduction: meaning of “connected companies relationship”

      2. 349. Application of amortised cost basis to connected companies relationships

      3. 350. Companies beginning to be connected

      4. 351. Companies ceasing to be connected

      5. 352. Disregard of related transactions

    6. Chapter 6

      Connected companies relationships: impairment losses and releases of debts

      1. Introduction

        1. 353. Introduction to Chapter

      2. Exclusion of debits for impaired or released connected companies debts

        1. 354. Exclusion of debits for impaired or released connected companies debts

        2. 355. Cessation of connection

        3. 356. Exception to section 354: swapping debt for equity

        4. 357. Exception to section 354: insolvent creditors

      3. Exclusion of credits for connected companies debts on release or reversal of impairments

        1. 358. Exclusion of credits on release of connected companies debts: general

        2. 359. Exclusion of credits on release of connected companies debts during creditor’s insolvency

        3. 360. Exclusion of credits on reversal of impairments of connected companies debts

      4. Deemed debt releases on impaired debts becoming held by connected company

        1. 361. Acquisition of creditor rights by connected company at undervalue

        2. 362. Parties becoming connected where creditor’s rights subject to impairment adjustment

        3. 363. Companies connected for sections 361 and 362

    7. Chapter 7

      Group relief claims involving impaired or released consortium debts

      1. 364. Introduction to Chapter

      2. 365. Reduction of impairment loss debits where group relief claimed

      3. 366. Effect where credit for release brought into account on amortised cost basis

      4. 367. Reduction of credits exceeding impairment losses

      5. 368. Reduction of claims where there are earlier net consortium debits

      6. 369. Carry forward of claims where there are no net consortium debits

      7. 370. Group accounting periods

      8. 371. Interpretation

    8. Chapter 8

      Connected parties relationships: late interest

      1. 372. Introduction to Chapter

      2. 373. Late interest treated as not accruing until paid in some cases

      3. 374. Connection between debtor and person standing in position of creditor

      4. 375. Loans to close companies by participators etc

      5. 376. Interpretation of section 375

      6. 377. Party to loan relationship having major interest in other party

      7. 378. Loans by trustees of occupational pension schemes

      8. 379. Persons indirectly standing in the position of creditor

    9. Chapter 9

      Partnerships involving companies

      1. 380. Partnerships involving companies

      2. 381. Determinations of credits and debits by company partners: general

      3. 382. Company partners using fair value accounting

      4. 383. Lending between partners and the partnership

      5. 384. Treatment of exchange gains and losses

      6. 385. Company partners' shares where firm owns deeply discounted securities

    10. Chapter 10

      Insurance companies

      1. Introduction

        1. 386. Overview of Chapter

      2. Treatment of deficit on basic life assurance and general annuity business

        1. 387. Treatment of deficit on basic life assurance and general annuity business: introduction

        2. 388. Basic rule: deficit set off against income and gains of deficit period

        3. 389. Claim to carry back deficit

        4. 390. Meaning of “available profits”

        5. 391. Carry forward of surplus deficit to next accounting period

      3. Exclusion of loan relationships of members of Lloyd's

        1. 392. Exclusion of loan relationships of members of Lloyd's

      4. Determination of questions requiring apportionments

        1. 393. General rules for some debtor relationships

        2. 394. Special rules for some debtor relationships

    11. Chapter 11

      Other special kinds of company

      1. Investment trusts' and venture capital trusts' creditor relationships

        1. 395. Investment trusts: profits or losses of a capital nature

        2. 396. Venture capital trusts: profits or losses of a capital nature

      2. Credit unions

        1. 397. Credit unions

    12. Chapter 12

      Special rules for particular kinds of securities

      1. Introduction

        1. 398. Overview of Chapter

      2. Gilt-edged securities

        1. 399. Index-linked gilt-edged securities: basic rules

        2. 400. Index-linked gilt-edged securities: adjustments for changes in index

        3. 401. Gilt strips

        4. 402. Market value of securities

        5. 403. Meaning of “strip”

        6. 404. Restriction on deductions etc relating to FOTRA securities

        7. 405. Certain non-UK residents with interest on 3½% War Loan 1952 Or After

      3. Deeply discounted securities: connected companies and close companies

        1. 406. Introduction

        2. 407. Postponement until redemption of debits for connected companies' deeply discounted securities

        3. 408. Companies connected for section 407

        4. 409. Postponement until redemption of debits for close companies' deeply discounted securities

        5. 410. Exceptions to section 409

        6. 411. Interpretation of section 409

        7. 412. Persons indirectly standing in the position of creditor

      4. Funding bonds

        1. 413. Issue of funding bonds

        2. 414. Redemption of funding bonds

      5. Derivatives

        1. 415. Loan relationships with embedded derivatives

        2. 416. Election for application of sections 415 and 585

        3. 417. Further provisions about elections under section 416

        4. 418. Loan relationships treated differently by connected debtor and creditor

        5. 419. Section 418: supplementary

      6. Options etc

        1. 420. Assumptions where options etc apply

    13. Chapter 13

      European cross-border transfers of business

      1. Introduction

        1. 421. Introduction to Chapter

      2. Transfers of loan relationships at notional carrying value

        1. 422. Transfer of loan relationship at notional carrying value

        2. 423. Transferor using fair value accounting

        3. 424. Reorganisations involving loan relationships

        4. 425. Original holder using fair value accounting

      3. Exception for tax avoidance cases

        1. 426. Tax avoidance etc

        2. 427. Procedure on application for clearance

        3. 428. Decision on application for clearance

      4. Transparent entities

        1. 429. Disapplication of Chapter where transparent entities involved

      5. Interpretation

        1. 430. Interpretation

    14. Chapter 14

      European cross-border mergers

      1. Introduction

        1. 431. Introduction to Chapter

        2. 432. Meaning of “the transferee” and “transferor”

      2. Transfers of loan relationships at notional carrying value

        1. 433. Transfer of loan relationship at notional carrying value

        2. 434. Transferor using fair value accounting

        3. 435. Reorganisations involving loan relationships

        4. 436. Original holder using fair value accounting

      3. Exception for tax avoidance cases

        1. 437. Tax avoidance etc

      4. Transparent entities

        1. 438. Disapplication of Chapter where transparent entities involved

      5. Interpretation

        1. 439. Interpretation

    15. Chapter 15

      Tax avoidance

      1. Introduction

        1. 440. Overview of Chapter

      2. Unallowable purposes and tax relief schemes

        1. 441. Loan relationships for unallowable purposes

        2. 442. Meaning of “unallowable purpose”

        3. 443. Restriction of relief for interest where tax relief schemes involved

      3. Transactions not at arm’s length: general

        1. 444. Transactions not at arm’s length: general

        2. 445. Disapplication of section 444 where Schedule 28AA to ICTA applies

        3. 446. Bringing into account adjustments made under Schedule 28AA to ICTA

      4. Transactions not at arm’s length: exchange gains and losses

        1. 447. Exchange gains and losses on debtor relationships: loans disregarded under Schedule 28AA to ICTA

        2. 448. Exchange gains and losses on debtor relationships: equity notes where holder associated with issuer

        3. 449. Exchange gains and losses on creditor relationships: no corresponding debtor relationship

        4. 450. Meaning of “corresponding debtor relationship”

        5. 451. Exception to section 449 where loan exceeds arm’s length amount

        6. 452. Exchange gains and losses where loan not on arm’s length terms

      5. Connected parties deriving benefit from creditor relationships

        1. 453. Connected parties deriving benefit from creditor relationships

      6. Tax advantages from resetting interest rates (“reset bonds”)

        1. 454. Application of fair value accounting: reset bonds etc

      7. Disposals for consideration not fully recognised by accounting practice

        1. 455. Disposals for consideration not fully recognised by accounting practice

    16. Chapter 16

      Non-trading deficits

      1. 456. Introduction to Chapter

      2. 457. Basic rule for deficits: carry forward to accounting periods after deficit period

      3. 458. Claim to carry forward deficit to later accounting periods

      4. 459. Claim to set off deficit against profits of deficit period or earlier periods

      5. 460. Time limits and procedure for claims under section 459(1)

      6. 461. Claim to set off deficit against other profits for the deficit period

      7. 462. Claim to carry back deficit to earlier accounting periods

      8. 463. Profits available for relief under section 462

    17. Chapter 17

      Priority rules

      1. 464. Priority of this Part for corporation tax purposes

      2. 465. Exclusion of distributions except in tax avoidance cases

    18. Chapter 18

      General and supplementary provisions

      1. Connections between persons

        1. 466. Companies connected for an accounting period

        2. 467. Connections where partnerships are involved

        3. 468. Connection between companies to be ignored in some circumstances

        4. 469. Creditors who are financial traders

        5. 470. Section 469: supplementary provisions

        6. 471. Creditors who are insurance companies carrying on BLAGAB

        7. 472. Meaning of “control”

        8. 473. Meaning of “major interest”

        9. 474. Treatment of connected companies and partnerships for section 473

        10. 475. Meaning of expressions relating to exchange gains and losses

      2. Other general definitions

        1. 476. Other definitions

  6. Part 6

    Relationships treated as loan relationships etc

    1. Chapter 1

      Introduction

      1. 477. Overview of Part

    2. Chapter 2

      Relevant non-lending relationships

      1. Introduction: meaning of “relevant non-lending relationship” etc

        1. 478. Relevant non-lending relationships: introduction

        2. 479. Relevant non-lending relationships not involving discounts

        3. 480. Relevant non-lending relationships involving discounts

      2. Application of Part 5 to relevant non-lending relationships

        1. 481. Application of Part 5 to relevant non-lending relationships

        2. 482. Miscellaneous rules about amounts to be brought into account because of this Chapter

      3. Meaning of “money debt” and “interest” in this Chapter

        1. 483. Exchange gains and losses: amounts treated as money debts

        2. 484. Provision not at arm’s length: meaning of “interest” and “money debt”

      4. Exclusions

        1. 485. Exclusion of debts where profits or losses within Part 7 or 8

        2. 486. Exclusion of exchange gains and losses in respect of tax debts etc

    3. Chapter 3

      OEICs, unit trusts and offshore funds

      1. Introduction

        1. 487. Overview of Chapter

        2. 488. Meaning of “open-ended investment company” etc

        3. 489. Meaning of “offshore fund” etc

      2. Holdings in OEICs, unit trusts and offshore funds treated as creditor relationship rights

        1. 490. Holdings in OEICs, unit trusts and offshore funds treated as creditor relationship rights

        2. 491. Holding coming within section 490: opening valuations

        3. 492. Disregard of investments made and liabilities incurred with avoidance intention etc

      3. The qualifying investments test

        1. 493. The qualifying investments test

        2. 494. Meaning of “qualifying investments”

        3. 495. Qualifying holdings

        4. 496. Meaning of “hedging relationship”

      4. Power to change investments that are qualifying investments

        1. 497. Power to change investments that are qualifying investments

    4. Chapter 4

      Building Societies

      1. 498. Building society dividends and interest

    5. Chapter 5

      Industrial and provident societies

      1. 499. Industrial and provident society payments treated as interest under loan relationship

      2. 500. Exclusion of interest where failure to make return

    6. Chapter 6

      Alternative finance arrangements

      1. Introduction

        1. 501. Introduction to Chapter

        2. 502. Meaning of “financial institution”

      2. Arrangements that are alternative finance arrangements

        1. 503. Purchase and resale arrangements

        2. 504. Diminishing shared ownership arrangements

        3. 505. Deposit arrangements

        4. 506. Profit share agency arrangements

        5. 507. Investment bond arrangements

        6. 508. Provision not at arm’s length: exclusion of arrangements from sections 503 to 507

      3. Treatment as loan relationships

        1. 509. Application of Part 5: general

        2. 510. Application of Part 5 to particular alternative finance arrangements

      4. Meaning of “alternative finance return”

        1. 511. Purchase and resale arrangements

        2. 512. Diminishing shared ownership arrangements

        3. 513. Other arrangements

      5. Treatment for other tax purposes

        1. 514. Exclusion of alternative finance return from consideration for sale of assets

        2. 515. Diminishing shared ownership arrangements not partnerships

        3. 516. Treatment of principal under profit sharing agency arrangements

        4. 517. Treatment of bond-holder under investment bond arrangements

        5. 518. Investment bond arrangements: treatment as securities

        6. 519. Investment bond arrangements: other provisions

        7. 520. Provision not at arm’s length: non-deductibility of relevant return

      6. Power to extend this Chapter to other arrangements

        1. 521. Power to extend this Chapter to other arrangements

    7. Chapter 7

      Shares with guaranteed returns etc

      1. Application of Part 5 to certain shares as rights under creditor relationship

        1. 522. Introduction to Chapter

        2. 523. Application of Part 5 to certain shares as rights under creditor relationship

      2. Shares subject to outstanding third party obligations

        1. 524. Shares subject to outstanding third party obligations

        2. 525. Meaning of “interest-like investment”

      3. Non-qualifying shares

        1. 526. Non-qualifying shares

        2. 527. The increasing value condition

        3. 528. Regulations about income-producing assets

        4. 529. The redemption return condition

        5. 530. The redemption return condition: excepted shares

        6. 531. The redemption return condition: unallowable purposes

        7. 532. The associated transactions condition

        8. 533. Power to change conditions for non-qualifying shares

      4. Consequences of section 523 applying or ceasing to apply

        1. 534. Amounts to be brought into account where section 523 applies

        2. 535. Shares ceasing to be shares to which section 523 applies

    8. Chapter 8

      Returns from partnerships

      1. 536. Introduction to Chapter

      2. 537. Payments in return for capital contribution to partnership

      3. 538. Change of partnership shares

    9. Chapter 9

      Manufactured interest etc

      1. 539. Introduction to Chapter

      2. 540. Manufactured interest treated as interest under loan relationship

      3. 541. Debits for deemed interest under stock lending arrangements disallowed

    10. Chapter 10

      Repos

      1. Introduction

        1. 542. Introduction to Chapter

      2. Creditor repos and creditor quasi-repos

        1. 543. Meaning of creditor repo

        2. 544. Meaning of creditor quasi-repo

        3. 545. Ignoring effect on lender etc of sale of securities

        4. 546. Charge on lender for finance return in respect of the advance

        5. 547. Repo under arrangement designed to produce quasi-interest: tax avoidance

      3. Debtor repos and debtor quasi-repos

        1. 548. Meaning of debtor repo

        2. 549. Meaning of debtor quasi-repo

        3. 550. Ignoring effect on borrower of sale of securities

        4. 551. Relief for borrower for finance charges in respect of the advance

      4. General provisions

        1. 552. General provisions about arrangements

        2. 553. Persons buying or selling for others

        3. 554. Power to modify this Chapter

        4. 555. Cases where section 554 applies: non-standard repos

      5. Interpretation

        1. 556. Meaning of securities and similar securities

        2. 557. Meaning of person receiving an asset

        3. 558. Interpretation of accounting expressions

        4. 559. Minor definitions

    11. Chapter 11

      Investment life insurance contracts

      1. Introduction

        1. 560. Introduction to Chapter

        2. 561. Meaning of “investment life insurance contract”

      2. Investment life assurance contracts treated as creditor relationships

        1. 562. Contract to be loan relationship

        2. 563. Increased non-trading credits for BLAGAB and EEA taxed contracts

        3. 564. Section 563: interpretation

        4. 565. Relevant amount where the relevant company uses fair value accounting

      3. Old accounting period contracts

        1. 566. Introduction

        2. 567. Gains on deemed surrenders to be brought into account on related transactions

        3. 568. Restriction on credits on old contracts: fair value accounting cases

        4. 569. Restriction on debits on old contracts: non-fair value accounting cases

  7. Part 7

    Derivative contracts

    1. Chapter 1

      Introduction

      1. Introduction

        1. 570. Overview of Part

      2. How profits and losses from derivative contracts are dealt with

        1. 571. General rule: profits chargeable as income

        2. 572. Profits and losses to be calculated using credits and debits given by this Part

        3. 573. Trading credits and debits to be brought into account under Part 3

        4. 574. Non-trading credits and debits to be brought into account under Part 5

    2. Chapter 2

      Contracts to which this Part applies

      1. Introduction

        1. 575. Overview of Chapter

      2. Meaning of “derivative contract” and other basic definitions

        1. 576. “Derivative contract”

        2. 577. “Relevant contract”

        3. 578. Relevant contracts of a company and being party to such contracts

        4. 579. The accounting conditions

        5. 580. “Option”

        6. 581. “Future”

        7. 582. “Contract for differences”

        8. 583. “Underlying subject matter”

      3. Cases where companies treated as parties to relevant contracts

        1. 584. Hybrid derivatives with embedded derivatives

        2. 585. Loan relationships with embedded derivatives

        3. 586. Other contracts with embedded derivatives

      4. Other contracts etc treated as derivative contracts

        1. 587. Contract relating to holding in OEIC, unit trust or offshore fund

        2. 588. Associated transaction treated as derivative contract

      5. Exclusions from derivative contracts

        1. 589. Contracts excluded because of underlying subject matter: general

        2. 590. Disregard of subordinate or small value underlying subject matter

        3. 591. Conditions A to E mentioned in section 589(5)

        4. 592. Embedded derivatives treated as meeting condition in section 591 etc

        5. 593. Contracts where part of underlying subject matter is excluded property

    3. Chapter 3

      Credits and debits to be brought into account: general

      1. Introduction

        1. 594. Overview of Chapter

      2. General principles

        1. 595. General principles about the bringing into account of credits and debits

        2. 596. Meaning of “related transaction”

      3. Amounts recognised in determining a company’s profit or loss

        1. 597. Amounts recognised in determining a company’s profit or loss

        2. 598. Regulations about recognised amounts

        3. 599. Meaning of “amounts recognised for accounting purposes”

      4. Application of fair value accounting

        1. 600. Contract which is or forms part of financial asset or liability

        2. 601. Contract relating to holding in OEIC, unit trust or offshore fund

        3. 602. Contract becoming one relating to holding in OEIC, unit trust or offshore fund

        4. 603. Associated transaction treated as derivative contract

      5. Rules differing from generally accepted accounting practice

        1. 604. Credits and debits treated as relating to capital expenditure

        2. 605. Credits and debits recognised in equity

      6. Miscellaneous

        1. 606. Exchange gains and losses

        2. 607. Pre-contract or abortive expenses

        3. 608. Company ceasing to be party to derivative contract

        4. 609. Company ceasing to be UK resident

        5. 610. Non-UK resident company ceasing to hold derivative contract for UK permanent establishment

        6. 611. Release under statutory insolvency arrangement of liability under derivative contract

    4. Chapter 4

      Further provision about credits and debits to be brought into account

      1. Introduction

        1. 612. Overview of Chapter

      2. Adjustments on change of accounting policy

        1. 613. Introduction to sections 614 and 615

        2. 614. Change of accounting policy involving change of value

        3. 615. Change of accounting policy after ceasing to be party to derivative contract

      3. Certain embedded derivatives

        1. 616. Disapplication of fair value accounting

        2. 617. Election for section 616 not to apply

        3. 618. Elections under section 617: groups of companies

      4. Partnerships involving companies

        1. 619. Partnerships involving companies

        2. 620. Determination of credits and debits by company partners

        3. 621. Company partners using fair value accounting

      5. Miscellaneous

        1. 622. Contracts ceasing to be derivative contracts

        2. 623. Index-linked gilt-edged securities with embedded contracts for differences

    5. Chapter 5

      Continuity of treatment on transfers within groups

      1. Introductory

        1. 624. Introduction to Chapter

      2. Group member replacing another as party to derivative contract

        1. 625. Group member replacing another as party to derivative contract

        2. 626. Transactions to which section 625 applies

        3. 627. Meaning of company replacing another as party to derivative contract

      3. Exceptions to section 625

        1. 628. Transferor using fair value accounting

        2. 629. Tax avoidance

      4. Transferee leaving group after replacing transferor as party to derivative contract

        1. 630. Introduction to sections 631 and 632

        2. 631. Transferee leaving group otherwise than because of exempt distribution

        3. 632. Transferee leaving group because of exempt distribution

    6. Chapter 6

      Special kinds of company

      1. Mutual trading companies

        1. 633. Mutual trading companies

      2. Insurance companies

        1. 634. Insurance companies

        2. 635. Creditor relationships: embedded derivatives which are options

        3. 636. Modifications of Chapter 5

      3. Investment and venture capital trusts

        1. 637. Investment trusts: profits or losses of a capital nature

        2. 638. Venture capital trusts: profits or losses of a capital nature

    7. Chapter 7

      Chargeable gains arising in relation to derivative contracts

      1. Introduction

        1. 639. Overview of Chapter

      2. Some credits and debits not to be brought into account under Part 5

        1. 640. Credits and debits not to be brought into account under Part 5

      3. Some derivative contracts to be taxed on a chargeable gains basis

        1. 641. Derivative contracts to be taxed on a chargeable gains basis

        2. 642. Exception from section 641

      4. Derivative contracts to which sections 640 and 641 apply

        1. 643. Contracts relating to land or certain tangible movable property

        2. 644. Income to be left out of account in determining whether section 643 applies

        3. 645. Creditor relationships: embedded derivatives which are options

        4. 646. Exclusions from section 645

        5. 647. Meaning of certain expressions in section 645

        6. 648. Creditor relationships: embedded derivatives which are exactly tracking contracts for differences

        7. 649. Meaning of certain expressions in section 648

        8. 650. Property based total return swaps

      5. Some credits and debits not to be brought into account under Part 3 or 5

        1. 651. Credits and debits not to be brought into account under Part 3 or Part 5

      6. Issuers of securities with embedded derivatives: deemed options

        1. 652. Introduction to sections 653 to 655

        2. 653. Shares issued or transferred as a result of exercise of deemed option

        3. 654. Payment instead of disposal on exercise of deemed option

        4. 655. Ceasing to be party to debtor relationship when deemed option not exercised

      7. Issuers of securities with embedded derivatives: deemed contracts for differences

        1. 656. Introduction to section 658

        2. 657. Meaning of “exactly tracking contract” in section 656

        3. 658. Chargeable gain or allowable loss treated as accruing

      8. Interpretation

        1. 659. Meaning of “relevant credits” and “relevant debits”

    8. Chapter 8

      Further provision about chargeable gains and derivative contracts

      1. Company ceasing to be party to certain contracts

        1. 660. Contract relating to holding in OEIC, unit trust or offshore fund

        2. 661. Contract which becomes derivative contract

      2. Contracts ceasing to be derivative contracts

        1. 662. Contracts ceasing to be derivative contracts

      3. Carry back of net losses on certain derivative contracts

        1. 663. Contracts to which section 641 applies

        2. 664. Meaning of certain expressions in section 663

      4. Issuers of securities with embedded derivatives: equity instruments

        1. 665. Introduction to section 666

        2. 666. Allowable loss treated as accruing

      5. Treatment of shares acquired in certain circumstances

        1. 667. Shares acquired on exercise of non-embedded option

        2. 668. Shares acquired on running of future to delivery

        3. 669. Meaning of G and L in sections 667 and 668

      6. Treatment of net gains and losses on exercise of option

        1. 670. Treatment of net gains and losses on exercise of option

        2. 671. Meaning of G, L and CV in section 670

      7. Treatment of net gains and losses on disposal of certain embedded derivatives

        1. 672. Treatment of net gains and losses on disposal of certain embedded derivatives

        2. 673. Meaning of G, L and CV in section 672

    9. Chapter 9

      European cross-border transfers of business

      1. Introduction

        1. 674. Introduction to Chapter

      2. Transfers of derivative contracts at notional carrying value

        1. 675. Transfer of derivative contract at notional carrying value

        2. 676. Transferor using fair value accounting

      3. Exception for tax avoidance cases and clearances

        1. 677. Tax avoidance etc

        2. 678. Procedure on application for clearance

        3. 679. Decision on application for clearance

      4. Transparent entities

        1. 680. Disapplication of Chapter where transparent entities involved

      5. Interpretation

        1. 681. Interpretation

    10. Chapter 10

      European cross-border mergers

      1. Introduction

        1. 682. Introduction to Chapter

        2. 683. Meaning of “the transferee” and “transferor”

      2. Transfers of derivative contracts at notional carrying value

        1. 684. Transfer of derivative contract at notional carrying value

        2. 685. Transferor using fair value accounting

      3. Exception for tax avoidance cases and clearances

        1. 686. Tax avoidance etc

      4. Transparent entities

        1. 687. Disapplication of Chapter where transparent entities involved

      5. Interpretation

        1. 688. Interpretation

    11. Chapter 11

      Tax avoidance

      1. Introduction

        1. 689. Overview of Chapter

      2. Unallowable purposes

        1. 690. Derivative contracts for unallowable purposes

        2. 691. Meaning of “unallowable purpose”

        3. 692. Allowance of accumulated net losses

      3. Transactions not at arm’s length

        1. 693. Bringing into account adjustments under Schedule 28AA to ICTA

        2. 694. Exchange gains and losses

        3. 695. Transfers of value to connected companies

      4. Transactions with non-UK residents

        1. 696. Derivative contracts with non-UK residents

        2. 697. Exceptions to section 696

      5. Disposals for consideration not fully recognised by accounting practice

        1. 698. Disposals for consideration not fully recognised by accounting practice

    12. Chapter 12

      Priority rules

      1. 699. Priority of this Part for corporation tax purposes

      2. 700. Relationship of this Part to Part 5: loan relationships

    13. Chapter 13

      General and supplementary provisions

      1. Power to amend certain provisions

        1. 701. Power to amend some provisions

      2. Other general definitions

        1. 702. “Carrying value”

        2. 703. “Chargeable asset”

        3. 704. “Creditor relationship” and “debtor relationship”

        4. 705. Expressions relating to exchange gains and losses

        5. 706. “Excluded body”

        6. 707. “Hedging relationship”

        7. 708. “Plain vanilla contract”

        8. 709. “Securities house”

        9. 710. Other definitions

  8. Part 8

    Intangible fixed assets

    1. Chapter 1

      Introduction

      1. Introductory

        1. 711. Overview of Part

      2. Basic definitions

        1. 712. “Intangible asset”

        2. 713. “Intangible fixed asset”

        3. 714. “Royalty”

      3. Goodwill

        1. 715. Application of this Part to goodwill

      4. Accounting rules and definitions

        1. 716. “Recognised” amounts and “GAAP-compliant accounts”

        2. 717. Companies without GAAP-compliant accounts

        3. 718. GAAP-compliant accounts: reference to consolidated group accounts

        4. 719. Accounting value

    2. Chapter 2

      Credits in respect of intangible fixed assets

      1. 720. Introduction

      2. 721. Receipts recognised as they accrue

      3. 722. Receipts in respect of royalties so far as not dealt with under section 721

      4. 723. Revaluation

      5. 724. Negative goodwill

      6. 725. Reversal of previous accounting loss

    3. Chapter 3

      Debits in respect of intangible fixed assets

      1. 726. Introduction

      2. 727. References to expenditure on an asset

      3. 728. Expenditure written off as it is incurred

      4. 729. Writing down on accounting basis

      5. 730. Writing down at fixed rate: election for fixed-rate basis

      6. 731. Writing down at fixed rate: calculation

      7. 732. Reversal of previous accounting gain

    4. Chapter 4

      Realisation of intangible fixed assets

      1. 733. Overview of Chapter

      2. 734. Meaning of “realisation”

      3. 735. Asset written down for tax purposes

      4. 736. Asset shown in balance sheet and not written down for tax purposes

      5. 737. Apportionment in case of part realisation

      6. 738. Asset not shown in balance sheet

      7. 739. Meaning of “proceeds of realisation”

      8. 740. Abortive expenditure on realisation

      9. 741. Meaning of “chargeable intangible asset” and “chargeable realisation gain”

    5. Chapter 5

      Calculation of tax written-down value

      1. 742. Asset written down on accounting basis

      2. 743. Asset written down at fixed rate

      3. 744. Effect of part realisation of asset

    6. Chapter 6

      How credits and debits are given effect

      1. Introductory

        1. 745. Introduction

        2. 746. “Non-trading credits” and “non-trading debits”

      2. Trading etc credits and debits

        1. 747. Assets held for purposes of trade

        2. 748. Assets held for purposes of property business

        3. 749. Assets held for purposes of mines, transport undertakings, etc

        4. 750. Assets held for purposes falling within more than one section

      3. Non-trading credits and debits

        1. 751. Non-trading gains and losses

        2. 752. Charge to tax on non-trading gains on intangible fixed assets

        3. 753. Treatment of non-trading losses

    7. Chapter 7

      Roll-over relief in case of realisation and reinvestment

      1. When the relief is given

        1. 754. The relief: the “old asset” and “other assets”

        2. 755. Conditions relating to the old asset and its realisation

        3. 756. Conditions relating to expenditure on other assets

        4. 757. Claim for relief

      2. How the relief is given

        1. 758. How the relief is given: general

        2. 759. Determination of appropriate proportion of cost and adjusted cost

        3. 760. References to cost of asset where asset affected by change of accounting policy

        4. 761. Declaration of provisional entitlement to relief

        5. 762. Realisation and reacquisition

        6. 763. Disregard of deemed realisations and reacquisitions

    8. Chapter 8

      Groups of companies: introduction

      1. Introductory

        1. 764. Meaning of “company”, “group” and “subsidiary”

      2. Rules

        1. 765. General rule: a company and its 75% subsidiaries form a group

        2. 766. Only effective 51% subsidiaries of principal company to be members of group

        3. 767. Principal company cannot be 75% subsidiary of another company

        4. 768. Company cannot be member of more than one group

        5. 769. Continuity of identity of group

        6. 770. Continuity where group includes an SE

        7. 771. Meaning of “effective 51% subsidiary”

        8. 772. Equity holders and profits or assets available for distribution

        9. 773. Supplementary provisions

    9. Chapter 9

      Application of this Part to groups of companies

      1. Introductory

        1. 774. Overview of Chapter

      2. Transfers within a group treated as tax-neutral

        1. 775. Transfers within a group

        2. 776. Meaning of “tax-neutral” transfer

      3. Roll-over relief under Chapter 7 (realisation and reinvestment)

        1. 777. Relief on realisation and reinvestment: application to group member

        2. 778. Relief on reinvestment: acquisition of group company: introduction

        3. 779. Rules that apply to cases within section 778(1)

      4. Company ceasing to be member of group

        1. 780. Deemed realisation and reacquisition at market value

        2. 781. Character of credits and debits brought into account as a result of section 780

        3. 782. Certain transferees of businesses etc not treated as leaving group

        4. 783. Associated companies leaving group at the same time

        5. 784. Groups with a relevant connection

        6. 785. Principal company becoming member of another group

        7. 786. Character of credits and debits brought into account as a result of section 785

        8. 787. Company ceasing to be member of group because of exempt distribution

        9. 788. Provisions supplementing sections 780 to 787

        10. 789. Merger carried out for genuine commercial reasons

        11. 790. Provisions supplementing section 789

        12. 791. Application of roll-over relief in relation to degrouping charge

      5. Reallocation of degrouping charge within group and recovery

        1. 792. Reallocation of charge within group

        2. 793. Further requirements about elections under section 792

        3. 794. Application of roll-over relief in relation to reallocated charge

        4. 795. Recovery of charge from another group company or controlling director

        5. 796. Interpretation of section 795

        6. 797. Recovery under section 795: procedure etc

        7. 798. Recovery under section 795: time limit

      6. Disregard of payments between group members for reliefs

        1. 799. Disregard of payments between group members for reliefs

    10. Chapter 10

      Excluded assets

      1. Introductory

        1. 800. Introduction

        2. 801. Right to dispose of or acquire excluded asset also excluded

        3. 802. Effect of partial exclusion

      2. Assets wholly excluded from this Part

        1. 803. Non-commercial purposes etc

        2. 804. Assets for which capital allowances previously made

        3. 805. Rights over tangible assets

        4. 806. Financial assets

        5. 807. Rights in companies, trusts etc

        6. 808. Assets representing production expenditure on films

        7. 809. Oil licences

      3. Assets excluded from this Part except as respects royalties

        1. 810. Mutual trade or business

        2. 811. Sound recordings

        3. 812. Master versions of films

        4. 813. Computer software treated as part of cost of related hardware

      4. Assets excluded from this Part to the extent specified

        1. 814. Research and development

        2. 815. Election to exclude capital expenditure on software

        3. 816. Further provision about elections under section 815

    11. Chapter 11

      Transfer of business or trade

      1. Introduction

        1. 817. Overview of Chapter

      2. Tax-neutral transfers

        1. 818. Company reconstruction involving transfer of business

        2. 819. European cross-border transfers of business: introduction

        3. 820. Transfer of assets on European cross-border transfer of business

        4. 821. European cross-border mergers: introduction

        5. 822. Transfer of assets on European cross-border merger

        6. 823. Interpretation of sections 821 and 822

        7. 824. Transfer of business of building society to company

        8. 825. Application of sections 780 and 785 where transfer within section 824 occurs

        9. 826. Amalgamation of, or transfer of engagements by, certain societies

      3. Transfer of assets to non-UK resident company

        1. 827. Claims to postpone charge on transfer

        2. 828. Relief on transfer

        3. 829. Charge on subsequent realisations

        4. 830. Exclusion from section 829 of group transfers

      4. The genuine commercial transaction requirement and clearance

        1. 831. The genuine commercial transaction requirement and clearance

        2. 832. Procedure on application for clearance

        3. 833. Decision on application for clearance

    12. Chapter 12

      Related parties

      1. Introductory

        1. 834. Overview of Chapter

      2. Meaning of “related party”, “control” and “major interest”

        1. 835. “Related party”

        2. 836. “Control”

        3. 837. “Major interest”

      3. Rights and powers to be taken into account

        1. 838. General rule

        2. 839. Rights and powers held jointly

        3. 840. Partnerships

      4. Meaning of “participator” and “associate”

        1. 841. “Participator” and “associate”

      5. Connected persons

        1. 842. Introduction

        2. 843. Who are connected persons

    13. Chapter 13

      Transactions between related parties

      1. Introductory

        1. 844. Overview of Chapter

      2. Transfers treated as being at market value

        1. 845. Transfer between company and related party treated as at market value

        2. 846. Transfers not at arm’s length

        3. 847. Transfers involving other taxes

        4. 848. Tax-neutral transfers

        5. 849. Transfers involving gifts of business assets

      3. Other rules

        1. 850. Part realisation involving related party acquisition: exclusion of roll-over relief

        2. 851. Delayed payment of royalty by company to related party

    14. Chapter 14

      Miscellaneous provisions

      1. Grants and other contributions to expenditure

        1. 852. Treatment of grants and other contributions to expenditure

        2. 853. Grants to be left out of account for tax purposes

      2. Finance leasing

        1. 854. Finance leasing etc

        2. 855. Further provision about regulations under section 854

      3. Values to be used in special cases

        1. 856. Assets acquired or realised together

        2. 857. Deemed market value acquisition: adjustment where nil accounting value

      4. Fungible assets

        1. 858. Fungible assets

      5. Assets ceasing to be or becoming chargeable intangible assets

        1. 859. Asset ceasing to be chargeable intangible asset: deemed realisation at market value

        2. 860. Asset ceasing to be chargeable intangible asset: postponement of gain

        3. 861. Treatment of postponed gain on subsequent realisation

        4. 862. Treatment of postponed gain in other cases

        5. 863. Asset becoming chargeable intangible asset

      6. Matters to be ignored

        1. 864. Tax avoidance arrangements to be ignored

        2. 865. Debits for expenditure not generally deductible for tax purposes

      7. Delayed payments and bad debts

        1. 866. Delayed payment of employees' remuneration

        2. 867. Provisions supplementing section 866

        3. 868. Delayed payment of pension contributions

        4. 869. Bad debts etc

      8. Controlled foreign companies

        1. 870. Assumptions for calculating chargeable profits

    15. Chapter 15

      Adjustments on change of accounting policy

      1. Introductory

        1. 871. Introduction to Chapter

      2. Change of policy involving change of value

        1. 872. Adjustments in respect of change

        2. 873. Effect of application of section 872 in later period and subsequently

      3. Change of policy involving disaggregation

        1. 874. Original asset not subject to fixed-rate writing down

        2. 875. Effect of application of section 874 in later period and subsequently

        3. 876. Original asset subject to fixed-rate writing down

        4. 877. Election for fixed-rate writing down in relation to resulting asset

      4. Supplementary

        1. 878. Exclusion of credits or debits brought into account under other provisions

        2. 879. Subsequent events affecting asset subject to adjustment under this Chapter

    16. Chapter 16

      Pre-FA 2002 assets etc

      1. Introduction

        1. 880. Overview of Chapter

        2. 881. Meaning of “pre-FA 2002 assets”

      2. General rule

        1. 882. Application of this Part to assets created or acquired on or after 1 April 2002

      3. When assets are treated as created or acquired

        1. 883. Assets treated as created or acquired when expenditure incurred

        2. 884. Internally-generated goodwill: time of creation

        3. 885. Certain other internally-generated assets: time of creation

        4. 886. Assets representing production expenditure on films: time of creation

      4. When expenditure treated as incurred

        1. 887. General rule

        2. 888. Cases where chargeable gains rule applies

        3. 889. Cases where capital allowances general rule applies

      5. Fungible assets

        1. 890. Fungible assets: application of section 858

        2. 891. Realisation and acquisition of fungible assets

      6. Assets treated as pre-FA 2002 assets

        1. 892. Certain assets acquired on transfer of business

        2. 893. Assets whose value derives from pre-FA 2002 assets

        3. 894. The preserved status conditions etc

        4. 895. Assets acquired in connection with disposals of pre-FA 2002 assets

      7. Application of Part to royalties and telecommunication rights

        1. 896. Application to royalties

        2. 897. Application to pre-FA 2002 assets consisting of telecommunication rights

      8. Roll-over relief for disposals of pre-FA 2002 assets

        1. 898. Relief where assets disposed of on or after 1 April 2002

        2. 899. Relief where degrouping charge on asset arises on or after 1 April 2002

        3. 900. Meaning of “chargeable asset within TCGA” in sections 898 and 899

    17. Chapter 17

      Insurance companies

      1. Effect of application of the I minus E basis: non-trading amounts

        1. 901. Effect of application of the I minus E basis: non-trading amounts

      2. Excluded assets and computer software

        1. 902. Excluded assets

        2. 903. Elections to exclude capital expenditure on computer software

      3. Miscellaneous

        1. 904. Transfers of life assurance business: transfers of assets treated as tax-neutral

        2. 905. Pre-FA 2002 assets: Lloyd’s syndicate capacity

    18. Chapter 18

      Priority rules

      1. 906. Priority of this Part for corporation tax purposes

  9. Part 9

    Intellectual property: know-how and patents

    1. Chapter 1

      Introduction

      1. 907. Overview of Part

    2. Chapter 2

      Disposals of know-how

      1. 908. Charge to tax on profits from disposals of know-how

      2. 909. Exceptions to charge under section 908

      3. 910. Profits charged under section 908

    3. Chapter 3

      Sales of patent rights

      1. Introductory

        1. 911. Overview of Chapter

      2. Charge to tax

        1. 912. Charge to tax on profits from sales of patent rights

        2. 913. Profits charged under section 912

      3. Spreading of charge to tax

        1. 914. UK resident companies: proceeds of sale not received in instalments

        2. 915. UK resident companies: proceeds of sale received in instalments

        3. 916. Non-UK resident companies: proceeds of sale not received in instalments

        4. 917. Non-UK resident companies: proceeds of sale received in instalments

        5. 918. Winding up of a body corporate

      4. Miscellaneous

        1. 919. Deduction of tax from payments to non-UK resident companies

        2. 920. Adjustments where tax has been deducted

        3. 921. Licences connected with patents

        4. 922. Rights to acquire future patent rights

        5. 923. Sums paid for Crown use etc treated as paid under licence

    4. Chapter 4

      Relief from corporation tax on patent income

      1. 924. Relief for expenses: patent income

      2. 925. How relief is given under section 924

    5. Chapter 5

      Supplementary

      1. 926. Contributions to expenditure

      2. 927. Contributions not made by public bodies nor eligible for tax relief

      3. 928. Exchanges

      4. 929. Apportionment where property sold together

      5. 930. Questions about apportionments affecting two or more persons

      6. 931. Meaning of “capital sums” etc

  10. Part 10

    Miscellaneous income

    1. Chapter 1

      Introduction

      1. 932. Overview of Part

    2. Chapter 2

      Dividends of non-UK resident companies

      1. 933. Charge to tax on dividends of non-UK resident companies

    3. Chapter 3

      Beneficiaries' income from estates in administration

      1. Introduction

        1. 934. Charge to tax on estate income

        2. 935. Absolute, limited and discretionary interests

        3. 936. Meaning of “UK estate” and “foreign estate”

      2. Types of estate income

        1. 937. Absolute interests in residue

        2. 938. Meaning of “the administration period”, “the final accounting period” and “the final tax year”

        3. 939. Limited interests in residue

        4. 940. Discretionary interests in residue

      3. Income charged

        1. 941. UK estates

        2. 942. Foreign estates

      4. Basic amount of estate income: general calculations rules

        1. 943. Absolute interests

        2. 944. Limited interests

        3. 945. Discretionary interests

        4. 946. Applicable rate for grossing up basic amounts of estate income

        5. 947. Aggregate income of the estate

      5. Further provisions for calculating estate income relating to absolute interests

        1. 948. Assumed income entitlement

        2. 949. Residuary income of the estate

        3. 950. Shares of residuary income of estate

        4. 951. Reduction in share of residuary income of estate

        5. 952. Applicable rate for determining assumed income entitlement (UK estates)

      6. Successive interests

        1. 953. Introduction

        2. 954. Successive absolute interests

        3. 955. Assumed income entitlement of holder of absolute interest following limited interest

        4. 956. Payments in respect of limited interests followed by absolute interests

        5. 957. Holders of limited interests

        6. 958. Basic amount of estate income: successive limited interests

        7. 959. Apportionments

      7. Relief where foreign estates have borne UK income tax

        1. 960. Relief in respect of tax relating to absolute interests

        2. 961. Relief in respect of tax relating to limited or discretionary interests

      8. General

        1. 962. Income from which basic amounts are treated as paid

        2. 963. Income treated as bearing income tax

        3. 964. Transfers of assets etc treated as payments

        4. 965. Assessments, adjustments and claims after the administration period

        5. 966. Power to obtain information from personal representatives and beneficiaries

        6. 967. Statements relating to estate income

      9. Supplementary

        1. 968. Meaning of “personal representatives”

    4. Chapter 4

      Income from holding an office

      1. 969. Charge to tax on income from holding an office

      2. 970. Rule restricting deductions for bad debts

    5. Chapter 5

      Distributions from unauthorised unit trusts

      1. 971. Overview of Chapter

      2. 972. Charge to tax under this Chapter

      3. 973. Amount of income treated as received

    6. Chapter 6

      Sale of foreign dividend coupons

      1. 974. Charge to tax under this Chapter

      2. 975. Meaning of “foreign holdings” etc

    7. Chapter 7

      Annual payments not otherwise charged

      1. 976. Overview of Chapter

      2. 977. Charge to tax on annual payments not otherwise charged

      3. 978. Exemption for payments by persons liable to pool betting duty

    8. Chapter 8

      Income not otherwise charged

      1. 979. Charge to tax on income not otherwise charged

      2. 980. Exemption for commercial occupation of woodlands in UK

      3. 981. Exemption for gains on financial futures

    9. Chapter 9

      Priority rules

      1. 982. Provisions which must be given priority over this Part

  11. Part 11

    Relief for particular employee share acquisition schemes

    1. Chapter 1

      Share incentive plans

      1. Introductory

        1. 983. Overview of Chapter

        2. 984. Chapter to form part of SIP code etc

      2. Deductions and receipts: general

        1. 985. References to a deduction being allowed to a company

        2. 986. Treatment of receipts under Chapter

      3. Deductions relating to setting up and running costs

        1. 987. Deduction for costs of setting up an approved share incentive plan

        2. 988. Deductions for running expenses of an approved share incentive plan

      4. Deductions relating to payments used to acquire shares

        1. 989. Deduction for contribution to plan trust

        2. 990. Withdrawal of deduction under section 989

        3. 991. Another deduction to be allowed if all acquired shares are awarded

        4. 992. Award of shares to excluded employee

        5. 993. Plan termination notice

      5. Deductions relating to provision of certain types of shares

        1. 994. Deduction for providing free or matching shares

        2. 995. Deduction for additional expense in providing partnership shares

        3. 996. Shares excluded from sections 994 and 995

        4. 997. No deduction for expenses in providing dividend shares

      6. Withdrawal of approval for a plan

        1. 998. Withdrawal of deductions if approval for share incentive plan withdrawn

    2. Chapter 2

      SAYE option schemes, company share option schemes and employee share options trusts

      1. 999. Deduction for costs of setting up SAYE option scheme or CSOP scheme

      2. 1000. Deduction for costs of setting up employee share ownership trust

  12. Part 12

    Other relief for employee share acquisitions

    1. Chapter 1

      Introduction

      1. Introductory

        1. 1001. Overview of Part

      2. Interpretation

        1. 1002. “Employment”

        2. 1003. “Shares” etc

        3. 1004. Groups, consortiums and commercial associations of companies

        4. 1005.