Corporation tax on chargeable gains
Part 1 Capital gains tax and corporation tax on chargeable gains
(1)As a result of section 2(1) and (2) of CTA 2009, corporation tax is charged on chargeable gains accruing to a company on the disposal of assets.
(2)The charge to corporation tax on chargeable gains has effect in accordance with this Act and all other relevant provisions of the Corporation Tax Acts.
“CTA 2009” means the Corporation Tax Act 2009 ;
Defined in s.288(1) · see it in the full Actand for the purposes of this definition “tax” means capital gains tax, corporation tax or income tax.
Defined in s.16A(2) · see it in the full Act“company” includes any body corporate or unincorporated association but does not include a partnership, and shall be construed in accordance with section 99 ;
Defined in s.288(1) · see it in the full Act(5) In this paragraph “company” and “group” shall be construed in accordance with section 170(2) to (9).
Defined in Sch.2 para.5(5) · see it in the full Act(a) the reference to “assets” were a reference to “property”, and
Defined in Sch.4ZA para.22(2) · see it in the full ActIn this sub-paragraph “asset” includes part of an asset.
Defined in Sch.8B para.6(1) · see it in the full ActThe provision prevented the beneficiaries’ personal allowable losses from absorbing attributed stockpiled gains. The advisers’ failure to account for it made their tax advice wrong, but did not establish breach of fiduciary duty by the trustees who relied on that advice (see paras [48]; [95]–[96]).
The court held that the composite transaction did not generate an allowable loss deductible against the taxpayer’s chargeable gain. The step producing the apparent loss could not be isolated from the overall self-cancelling scheme (see paras [8]; [39]). The court did not need to decide whether the claimed loss met the deduction provision when considered separately. Its conclusion that the composite transaction generated no statutory loss resolved the issue (see paras [26]; [39]).
The provision prevented beneficiaries' allowable personal losses from being set against gains attributed from the offshore settlements. Its omission from the professional advice caused the Futter trustees' tax mistake. (see paras [17]–[20]; [133]–[144])
What each judgment says about section 2 is in the case-law panel in the full Act.