The Corporation Tax Act 2009 (CTA 2009), produced by the tax law rewrite project, has come into force for corporation tax purposes for accounting periods ending on or after 1 April 2009 and for income tax and capital gains tax purposes for the tax year 2009-10 and subsequent tax years.
This Act is expected to be followed by a second Bill dealing with corporation tax. This was published in draft for consultation on 3 March 2009. (A third Bill covering international and miscellaneous provisions which applies in part for corporation purposes was published in draft at the same time.)
CTA 2009 consists largely of provisions covering much the same ground as those rewritten in ITTOIA for income tax, but includes provisions that are confined to corporation tax such as those dealing with loan relationships, derivative contracts, research and development and expenses of investment businesses. The second Corporation Tax Bill includes rates of tax, reliefs, losses, rules for special vehicles such as REITs and AUTs, special regimes such as repos, leasing, oil and tax avoidance.
The law is rewritten to make it clearer and easier to use. The structure is logical, with each of the main areas in a part of its own.
In the main, CTA 2009 does not change the effect of the law but it does correct some minor anomalies. It also incorporates two extra-statutory concessions and one statement of practice.
Particular features of CTA 2009 include the removal of references to schedules and cases, and foreign income and UK source income are amalgamated.
CTA 2009 is divided into 17 Parts and 4 Schedules:
- Part 1: Introduction
This part provides an overview to the Act as a whole. - Part 2: Charge to Corporation Tax: Basic Provisions
This part rewrites the charge to Corporation Tax on resident and non-resident companies, the rules of company residence and of accounting periods. - Part 3: Trading Income
This part calculates the profits of a trade, applies the rules for particular trades and identifies components of trading income including post-cessation receipts. - Part 4: Property Income
This part rewrites the Corporation Tax rules on property income including lease premiums, furnished holiday accommodation and mineral royalties. - Part 5: Loan Relationships
This part rewrites the loan relationship provisions, mainly Chapter 2 of Part 4 of FA 1996. - Part 6: Relationships treated as Loan Relationships
This part rewrites provisions on relationships treated as loan relationships, many of which are based on provisions outside Chapter 2 of Part 4 of FA 1996 such as alternative finance arrangements in FA 2005 and repos in FA 2007. - Part 7: Derivative Contracts
This part rewrites the provisions for derivative contracts in Schedule 26 to FA 2002. - Part 8: Intangible Fixed Assets
This part rewrites the rules on intangible fixed assets in Schedule 29 to FA 2002. - Part 9: Intellectual Property: Know-How and Patents
This part rewrites the rules on disposal of know-how, sales of patent rights and relief on patent income in sections 524 to 533 of ICTA. - Part 10: Miscellaneous Income
This part brings together income not included elsewhere; foreign dividends, estates in administration, annual payments and income not otherwise charged (old Case VI of Schedule D). - Part 11: Relief for Particular Employee Share Acquisition Schemes
This part rewrites the relief for share incentive plans in Schedule 4AA to ICTA and option schemes in sections 84A and 85A of ICTA. - Part 12: Other Relief for Employee Share Acquisition
This part rewrites the relief for share acquisition schemes in Schedule 23 to FA 2003. - Part 13: Additional Relief for Expenditure on Research and Development
This part rewrites the special relief for research and development expenditure including relief for SMEs, sub-contracted work and vaccine research in Schedules 10 and 20 to FA 2000 and Schedules 12 and 13 to FA 2002. - Part 14: Remediation of Contaminated Land
This part rewrites the relief for expenditure on remedying contaminated land in Schedule 22 to FA 2001. - Part 15: Film Production
This part rewrites the rules on the taxation of film production in Chapter 3 of Part 3 of FA 2006. - Part 16: Companies with Investment Business
This part rewrites the rules for investment companies. - Part 17: Partnerships
This part rewrites the tax rules that apply for partnerships. - Part 18: Unremittable Income
This part rewrites the rules on unremittable income in section 584 of ICTA. - Part 19: General Exemptions
This part rewrites various exemptions from tax including FOTRA securities and housing grants. - Part 20: General Calculation Rules
This part contains various general rules that apply to all income charged to corporation tax. These include restriction on deductions for unpaid remuneration, employee benefit contributions, business entertaining and other general rules. - Part 21: Other General Provisions
This part includes provisions of a general nature including orders and regulations, definitions and Treasury powers in relation to the Act. - Schedules - Minor and consequential amendments,Transitionals and savings, Repeals and revocations, Index of defined expressions,
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