Regulation 69X Ring-fencing of tax-exempt businessF1

(1)

For the purposes of corporation tax, the business of F (tax-exempt) shall be treated as a separate business (distinct from—

(a)

any business carried on by F (pre-entry),

(b)

any business carried on by F (residual), and

(c)

any business carried on by F (post-cessation)).

(2)

For the purposes of corporation tax, F (tax-exempt) shall be treated as a separate company (distinct from—

(a)

F (pre-entry),

(b)

F (residual), and

(c)

F (post-cessation)).

(3)

In particular—

(a)

a loss incurred by F (tax-exempt) may not be set off against the net income of F (residual),

(b)

a loss incurred in respect of F (residual) may not be set off against the net income of F (tax exempt),

(c)

a loss incurred in respect of F (pre-entry) may not be set off against the net income of F (tax-exempt) (but this regulation does not prevent a loss of that kind from being set off against profits of F (residual)),

(d)

a loss incurred by F (tax-exempt) may not be set off against profits arising to F (post-cessation) (in respect of business of any kind), and

(e)

receipts accruing after entry but relating to business of F (pre-entry) shall not be treated as receipts of F (tax-exempt).

(4)

In paragraph (3) a reference to a loss includes a reference to a deficit, expense, charge or allowance.

(5)

Section 392B of ICTA (ring-fencing of losses from overseas property business) shall not apply to business of F (tax-exempt).

(6)

Paragraphs 5B and 5C of Schedule 28AA to ICTA (transfer pricing: exemption for small and medium enterprises) shall not apply to an open-ended investment company to which this Part applies (whether to F (tax-exempt) or to F (residual)).

Annotations

Textual amendments

F1: Pt. 4A inserted (6.4.2008) by The Authorised Investment Funds (Tax) (Amendment) Regulations 2008 (S.I. 2008/705), regs. 1, 5