Legalize / United Kingdom / Public General Act

Income and Corporation Taxes Act 1988

Type Public General Act

Publication 1988-02-09

Last updated 2022-07-14

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

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Qualifying companies

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Tax year

Accounting periods

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The pool of qualifying E&A losses and the pool of non-qualifying losses

Interest on payments in respect of corporation tax and meaning of “the material date".

Trading stock.

VAT penalties etc.

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The appropriate percentage

Car with CO2 emissions figure

The lower threshold

Bi-fuel cars

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Supplement in respect of a post-commencement period

The non-qualifying pool

Supplement in respect of a pre-commencement accounting period

Qualifying companies

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Interpretation of the Corporation Tax Acts.

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Interest: special relationship.

The mixed pool of qualifying E&A expenditure and supplement previously allowed

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Amount of post-commencement supplement for a post-commencement period

Qualifying companies

The non-qualifying pool

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Qualifying companies

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Qualifying companies

Supplement in respect of a pre-commencement accounting period

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Supplement in respect of a post-commencement period

Amount of post-commencement supplement for a post-commencement period

Supplement in respect of a pre-commencement accounting period

Supplement in respect of a post-commencement period

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Company carrying on life assurance business and other insurance business

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Qualifying companies

Supplement in respect of a pre-commencement accounting period

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Supplement in respect of a pre-commencement accounting period

The pool of qualifying E&A losses and the pool of non-qualifying losses

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Change in company ownership: corporation tax.

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The pool of qualifying E&A losses and the pool of non-qualifying losses

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About this Schedule

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The mixed pool of qualifying E&A expenditure and supplement previously allowed

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The pool of qualifying E&A losses and the pool of non-qualifying losses

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About this Schedule

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Interest ceasing to be relevant loan interest, etc.

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Reduction in chargeable profits following an exempt period

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Power to inspect documents.

The Arbitration Convention.

About this Schedule

Supplement in respect of a pre-commencement accounting period

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The non-qualifying pool

About this Schedule

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About this Schedule

Qualifying companies

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Accounting periods

The non-qualifying pool

About this Schedule

Accounting periods

The mixed pool of qualifying E&A expenditure and supplement previously allowed

Amount of post-commencement supplement for a post-commencement period

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Terminal losses.

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Supplement in respect of a post-commencement period

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Introduction

Adjustment of profits on averaging claim

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About this Schedule

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Accounting periods

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The approved amount: passenger payments

Amount of post-commencement supplement for a post-commencement period

The non-qualifying pool

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Qualifying trade, profession or vocation

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The mixed pool of qualifying E&A expenditure and supplement previously allowed

Supplement in respect of a pre-commencement accounting period

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Accounting periods

Children’s tax credit.

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Interpretation of the Corporation Tax Acts.

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Introduction

Qualifying companies

Amount of post-commencement supplement for a post-commencement period

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Accounting periods

Supplement in respect of a post-commencement period

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The mixed pool of qualifying E&A expenditure and supplement previously allowed

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The pool of qualifying E&A losses and the pool of non-qualifying losses

Write-off of government investment.

Modifications for change of tax basis

Taxation in respect of other business: withdrawal of “qualifying” status from incorporated friendly society.

Supplement in respect of a pre-commencement accounting period

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Qualifying trade, profession or vocation

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The mixed pool of qualifying E&A expenditure and supplement previously allowed

Amount of post-commencement supplement for a post-commencement period

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Supplement in respect of a post-commencement period

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Exclusions from section 423.

Modification of s. 444BA for mutual or overseas business and for non-resident companies.

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Exemption for trade unions and employers’ associations.

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Qualifying companies

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Introduction

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Amount of post-commencement supplement for a post-commencement period

The non-qualifying pool

The mixed pool of qualifying E&A expenditure and supplement previously allowed

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468A

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468A

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Qualifying trade, profession or vocation

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About this Schedule

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Meaning of “research and development”.

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How averaging claim is given effect

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About this Schedule

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The pool of qualifying E&A losses and the pool of non-qualifying losses

The mixed pool of qualifying E&A expenditure and supplement previously allowed

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Qualifying trade, profession or vocation

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Supplement in respect of a pre-commencement accounting period

Amount of post-commencement supplement for a post-commencement period

The non-qualifying pool

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Introduction

Adjustment of profits on averaging claim

About this Schedule

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Meaning of “industrial assurance business”

20A

In this Part of this Schedule “industrial assurance business” means any industrial assurance business within the meaning given by—

(a) section 1(2) of the Industrial Assurance Act 1923, or

(b) Article 3(1) of the Industrial Assurance (Northern Ireland) Order 1979,

which was carried on before 1 December 2001.

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The mixed pool of qualifying E&A expenditure and supplement previously allowed

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“Deposit-taker”, “deposit” and “relevant deposit”.

Reserves of marketing boards and certain other statutory bodies.

UK property business or overseas property business

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European cross-border transfers of business

807B

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807C

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European cross-border mergers

807D

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807E

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Transparent entities involved in cross-border transfers and mergers

807F

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807G

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Maximum benefits payable to members.

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Distribution accounts.

508A

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508B

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508A

(1) Subsection (2) applies in a case where members of a qualifying contemplative religious community transfer all their income and assets, or covenant all their income, to the community (“the independent community”) (and for this purpose it is irrelevant whether or not the community is part of an order or religious institution).

(2) As respects each chargeable period of the independent community, and each person who is a qualifying member of the independent community at any time in that period, the independent community shall be treated for the purposes of corporation tax as if an amount of its profits for the chargeable period equal to the relevant amount (see subsections (5) to (7)) were income of the qualifying member.

(3) Subsection (4) applies in a case where—

(a) one or more qualifying contemplative religious communities (“constituent communities”) are part of an order or religious institution (“the parent body”), and

(b) members of the constituent communities transfer all their income and assets, or covenant all their income, to the parent body.

(4) As respects each chargeable period of the parent body, and each person who is a qualifying member of a constituent community at any time in that period, the parent body shall be treated for the purposes of corporation tax as if an amount of its profits for the chargeable period equal to the relevant amount (see subsections (5) to (7)) were income of the qualifying member.

(5) For the purposes of subsections (2) and (4), the relevant amount, in relation to a chargeable period, is the amount of the annual personal allowance for persons born after 5 April 1948 (see section 35 of ITA 2007) for—

(a) the tax year which begins in the chargeable period, or

(b) if no tax year begins in the chargeable period, the tax year which is current when the chargeable period begins.

(6) But, if the chargeable period is less than 12 months, the relevant amount is—

$P365×A$

where—

P is the number of days in the chargeable period;

A is the amount determined under subsection (5) in relation to the chargeable period.

(7) If, during the chargeable period, an individual ceases to be a qualifying member of the independent community or a constituent community (otherwise than on death), the relevant amount, in relation to the chargeable period and that qualifying member, is—

$QP×B$

where—

Q is the number of days in the chargeable period for which the individual is a qualifying member of the independent community or constituent community;

P is the number of days in the chargeable period;

B is the amount determined under subsection (5), or subsections (5) and (6), in relation to the chargeable period.

(8) So far as the exemption from corporation tax conferred by this section calls for repayment of tax, no repayment shall be made except on a claim made by the independent community or parent body.

(9) In a case where a member of an independent community or constituent community—

(a) has transferred or covenanted income to the community (in the case of an independent community) or the parent body (in the case of a constituent community), and

(b) has income for a tax year which does not exceed 20% of the annual personal allowance for persons born after 5 April 1948 (see section 35 of ITA 2007) for that tax year,

the member is, for the purposes of this section, to be taken to have transferred or covenanted all his or her income for that tax year to the community or parent body.

(10) For the purposes of this section a contemplative religious community is a “qualifying” contemplative religious community if—

(a) the community is established in the United Kingdom,

(b) the members of the community live and practise their religion in a communal establishment, and

(c) the community is not a charity, but the religion that is professed by the members of the community does not prevent the community from being a charity.

(11) In this section—

“member”, in relation to a religious community, means an individual who—is living in the community, andhas taken vows or made equivalent commitments (whether probationary or not);

“qualifying member”, in relation to a religious community, means a member of the community who—has been a member of the community for a period of at least six months, andhas transferred all his or her income and assets, or covenanted all his or her income, to the community (in the case of an independent community) or the parent body (in the case of a constituent community).

508B

(1) Subsection (2) applies if, as respects a chargeable period—

(a) section 508A(2) applies in relation to an independent community,

(b) the profits of the independent community in the chargeable period are less than the total of the amounts that fall to be treated as income of the qualifying members of the community in accordance with section 508A(2), and

(2) As respects the chargeable period and each qualifying member of the independent community, the community shall be treated for the purposes of corporation tax as if the relevant amount of its chargeable gains for that period were income of the qualifying member.

(3) Subsection (4) applies if, as respects a chargeable period—

(a) section 508A(4) applies in relation to a parent body,

(b) the profits of the parent body in the chargeable period are less than the total of the amounts that fall to be treated as income of the qualifying members of the constituent communities in accordance with section 508A(4), and

(4) As respects the chargeable period and each qualifying member of a constituent community, the parent body shall be treated for the purposes of corporation tax as if the relevant amount of its chargeable gains for that period were income of the qualifying member.

(5) For the purposes of subsections (2) and (4), the relevant amount, in relation to a qualifying member of the independent community or a constituent community, is the smaller of—

(a) the shortfall in profits, and

(b) the average gain.

(6) The shortfall in profits is the difference between—

(a) the relevant amount determined under section 508A(5) to (7) in relation to the qualifying member, and

(b) the amount that has actually been treated as the income of the qualifying member.

(7) The average gain is—

$GN$

where—

G is the amount of the chargeable gains which the independent community or parent body has in the chargeable period;

N is the number calculated by adding together the relevant value for each qualifying member of the independent community or constituent communities who, under section 508A(2) or (4), falls to be treated as having income.

(8) For the purposes of calculating “N” in subsection (7)—

(a) the relevant value for a qualifying member is 1;

(b) but, if section 508A(7) applies in relation to the qualifying member, the relevant value for that member is—

$1×QP$

where Q and P have the same meanings as in section 508A(7).

(9) So far as the exemption from corporation tax conferred by this section calls for repayment of tax, no repayment shall be made except on a claim made by the independent community or parent body.

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Other special provisions

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