Corporation Tax (Northern Ireland) Act 2015
| Year | 2015 |
Corporation Tax (Northern Ireland) Act 2015
2015 CHAPTER 21
An Act to make provision for and in connection with the creation of a Northern Ireland rate of corporation tax.
[26th March 2015]
Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:-
1 Trading profits taxable at the Northern Ireland rate
After Part 8A of CTA 2010 insert-
"PART 8B
Trading profits taxable at the Northern Ireland rate
CHAPTER 1
Introductory
357H Introduction
(1) This Part is about the Northern Ireland rate of corporation tax and the application of that rate to Northern Ireland profits.
(2) Chapter 2 is about how the Northern Ireland rate is determined.
(a) applies the Northern Ireland rate to Northern Ireland profits;
(b) makes provision about the operation of certain reliefs for trading losses that are given against profits.
Chapter 4 for definitions of "Northern Ireland company", "qualifying trade", "SME" and "Northern Ireland employer";
Chapter 5 for provision about whether a company has a Northern Ireland regional establishment (a "NIRE").
Chapter 6 for rules applying in the case of a Northern Ireland company that is an SME;
Chapter 7 for rules applying in the case of a Northern Ireland company that is not an SME.
(6) Chapter 8 is about the treatment of intangible fixed assets in relation to Northern Ireland companies.
Chapter 9 for provision about R&D expenditure credits and relief for expenditure relating to research and development;
Chapter 10 for provision about relief for expenditure relating to the remediation of contaminated or derelict land;
Chapter 11 for provision about film tax relief;
Chapter 12 for provision about television production;
Chapter 13 for provision about video games development;
Chapter 14 for provision about theatrical productions;
Chapter 15 for provision about profits arising from exploitation of patents etc.
(8) Chapter 16 contains rules for determining whether profits or losses of a trade are "Northern Ireland profits" or "Northern Ireland losses" in the case of a company that is a partner in a Northern Ireland firm.
(a) defines "excluded trade" and "excluded activity" (profits of which are not Northern Ireland profits), and
CHAPTER 2
The Northern Ireland rate
357I The Northern Ireland rate
(i) sets a rate under section 357IA for the year, and
(ii) is passed before the beginning of the year,
the rate set by the resolution;
(b) if the Northern Ireland rate for the year is not determined under paragraph (a), but the Northern Ireland rate for one or more earlier financial years was determined under that paragraph, the rate for the most recent of those earlier years;
(c) otherwise, the main rate.
(2) For the purposes of subsection (1)(a)(ii), a resolution passed before the beginning of a financial year is treated as not having been so passed if it is cancelled by a resolution under section 357IA that is itself passed before the beginning of the year.
357IA Power of Northern Ireland Assembly to set Northern Ireland rate
(1) The Northern Ireland Assembly ("the Assembly") may by resolution set the Northern Ireland rate for one or more financial years specified in the resolution.
(2) The Assembly may by resolution cancel a resolution under subsection (1).
(a) is made by the Minister of Finance and Personnel, and
(b) is signified to the Assembly by the Minister or on the Minister's behalf.
(4) A resolution under this section may not be passed by the Assembly without cross-community support.
(5) Section 63 of the Northern Ireland Act 1998 (financial acts of the Assembly) does not apply to a resolution under this section.
(6) This section authorises the setting of a nil rate.
CHAPTER 3
Northern Ireland rate applied to Northern Ireland profits and losses
Introductory
357J Introductory
(a) the charge to corporation tax on Northern Ireland profits and mainstream profits, and
(b) the rate at which Northern Ireland profits are charged.
(a) about the availability of relief for Northern Ireland losses and mainstream losses, and
(b) restricting the amount of relief given for Northern Ireland losses in certain circumstances.
Profits chargeable to corporation tax and rates
357JA Profits chargeable to corporation tax and rates
(1) The reference in section 35 of CTA 2009 (charge to tax on trade profits) to the profits of a trade is, where a company carrying on a trade in an accounting period has Northern Ireland profits of the trade or mainstream profits of the trade, a reference to those Northern Ireland profits or mainstream profits.
(2) Northern Ireland profits are charged to corporation tax at the Northern Ireland rate.
Section 3(1) of this Act (corporation tax charged at main rate) has effect subject to this subsection.
Loss relief in relation to Northern Ireland profits and losses: section 37
357JB Availability of relief
(1) The reference in section 37(1) (relief for trade losses against total profits) to a loss in the trade is, where a company carrying on a trade in an accounting period has Northern Ireland losses of the trade or mainstream losses of the trade, a reference to those Northern Ireland losses or mainstream losses.
(a) relief under section 37 is available in relation to each of those losses separately (so that the company may make a claim in relation to only one, or claims in relation to both), and
(b) where the company makes claims in relation to both, the claims may be made in either order.
(a) a company makes a claim under section 37 for relief for a Northern Ireland loss, and
(b) the profits against which the relief is claimed include some profits of the trade that are Northern Ireland profits and some that are not,
the relief is given first, so far as possible, against the Northern Ireland profits.
(a) a company makes a claim under section 37 for relief for a loss that is not a Northern Ireland loss, and
(b) the profits against which the relief is claimed include some profits of the trade that are Northern Ireland profits and some that are not,
the relief is given first, so far as possible, against the profits that are not Northern Ireland profits.
357JC Restriction on deductions
(a) a company makes a claim under section 37 for relief for a Northern Ireland loss ("the loss"),
(b) the profits against which the relief is claimed include profits that are not Northern Ireland profits, and
(c) at any time during the accounting period for which the relief is claimed ("the profit period"), the Northern Ireland rate is lower than the main rate.
(2) The reference in section 37(4) (amount of deduction) to "the amount of the loss" is to the restricted deduction for the loss, as determined under section 357JJ (restricted deduction where Northern Ireland rate lower than main rate).
Loss relief in relation to Northern Ireland profits and losses: section 45
357JD Availability of relief
(1) The reference in section 45(1) (carry forward of trade loss against subsequent profits) to a loss in the trade is, where a company carrying on a trade in an accounting period has Northern Ireland losses of the trade or mainstream losses of the trade, a reference to those Northern Ireland losses or mainstream losses.
(a) relief is given under section 45 for a Northern Ireland loss, and
(b) the profits against which the relief is given include some profits of the trade that are Northern Ireland profits and some that are not,
the relief is given first, so far as possible, against the Northern Ireland profits.
(a) relief is given under section 45 for a loss that is not a Northern Ireland loss, and
(b) the profits against which the relief is given include some profits of the trade that are Northern Ireland profits and some that are not,
the relief is given first, so far as possible, against the profits that are not Northern Ireland profits.
357JE Restriction on deductions
(a) relief is given under section 45 for a Northern Ireland loss ("the loss"),
(b) the profits against which the relief is given include profits that are not Northern Ireland profits, and
(c) at any time during the accounting period for which the relief is given ("the profit period"), the Northern Ireland rate is lower than the main rate.
(2) The reference in section 45(4)(b) (amount by which profits are reduced) to "the unrelieved loss" is to the restricted deduction for the loss, as determined under section 357JJ (restricted deduction where Northern Ireland rate lower than main rate).
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