SCHEDULES
SCHEDULE 9Profits from the exploitation of patents etc: consequential
1
CTA 2010 is amended in accordance with this Schedule.
2
In section 357B (meaning of “qualifying company”), in subsection (3)(b)(ii), for “section 357A” substitute “
section 357A(1)
”
.
3
In the heading of Chapter 3 of Part 8A, after “profits” insert “
: cases mentioned in section 357A(7): no income from new IP
”
.
4
1
Section 357C (relevant IP profits) is amended as follows.
2
Before subsection (1) insert—
A1
This section applies for the purposes of determining the relevant IP profits of a trade of a company for an accounting period in a case where—
a
the accounting period began before 1 July 2021,
b
the company is not a new entrant (see section 357A(11)), and
c
none of the amounts of relevant IP income brought into account as credits in calculating the profits of the trade for the accounting period is properly attributable to a new qualifying IP right (see section 357BP).
But see also section 357D (alternative method of calculating relevant IP profits in such a case).
3
In subsection (1)—
a
in the words before Step 1, omit “of a trade of a company for an accounting period”,
b
in Step 2, for “357CC and 357CD” substitute “
357BH to 357BHC
”
,
c
in Step 4, after “routine return figure” insert “
in relation to the trade for the accounting period
”
,
d
in Step 5, for “elected” substitute “
made an election under section 357CL
”
, and
e
in Step 6, after “marketing assets return figure” insert “
in relation to the trade for the accounting period
”
.
5
In section 357CA (total gross income of a trade), in subsection (2), for “section 357CB” substitute “
section 357BG
”
.
6
Omit sections 357CB to 357CF.
7
1
Section 357CG (adjustments in calculating profits of trade) is amended as follows.
2
In subsection (1) after “determining” insert “
under section 357C
”
.
3
In subsection (4), in the words after paragraph (b), for “section 357CB” substitute “
section 357BG
”
.
4
In subsection (6), in paragraph (a)(ii) of the definition of “relevant accounting period”, for “section 357A” substitute “
section 357A(1)
”
.
8
In section 357CI (routine return figure), in Step 1 in subsection (1), for “sections 357CJ and 357CK” substitute “
sections 357BJA and 357BJB
”
.
9
Omit sections 357CJ and 357CK.
10
1
Section 357CL (companies eligible to elect for small claims treatment) is amended as follows.
2
In subsection (1) for “elect” substitute “
make an election under this section
”
.
3
In subsection (6) for “section 357A” substitute “
section 357A(1)
”
.
11
In section 357CM (small claims amount), in subsection (1), for “elects” substitute “
makes an election under section 357CL
”
.
12
1
Section 357D (alternative method of calculating relevant IP profits: “streaming”) is amended as follows.
2
In subsection (1) at the end insert
in a case where—
a
the accounting period began before 1 July 2021,
b
the company is not a new entrant (see section 357A(11)), and
c
none of the amounts of relevant IP income brought into account as credits in calculating the profits of the trade for the accounting period is properly attributable to a new qualifying IP right (see section 357BP).
3
For subsection (4) substitute—
4
A company must apply section 357DA (instead of section 357C) for the purposes of determining the relevant IP profits of a trade of the company for an accounting period in a case mentioned in subsection (1) if any of the mandatory streaming conditions in section 357DC is met in relation to the trade for the period.
13
1
Section 357DA (relevant IP profits) is amended as follows.
2
In subsection (1)—
a
in Step 1—
i
for “section 357CB” substitute “
section 357BG
”
, and
ii
for “sections 357CC and 357CD” substitute “
sections 357BH to 357BHC
”
,
b
in Step 4, after “routine return figure” insert “
in relation to the trade for the accounting period
”
,
c
in Step 5, for “elected” substitute “
made an election under section 357CL
”
, and
d
in Step 6, after “marketing assets return figure” insert “
in relation to the trade for the accounting period
”
.
3
In subsection (4), in the words after paragraph (b), for “sections 357CJ and 357CK” substitute “
sections 357BJA and 357BJB
”
.
14
1
Section 357DC (the mandatory streaming conditions) is amended as follows.
2
In subsection (8)(a) for “section 357CC” substitute “
section 357BH
”
.
3
In subsection (9)(a) for “section 357CC(6)” substitute “
section 357BH(6)
”
.
15
In section 357EB (allocation of set-off amount within a group) in subsection (3)(a) for “section 357A” substitute “
section 357A(1)
”
.
16
In section 357ED (company ceasing to carry on trade etc) in subsection (2)(c) for “section 357A” substitute “
section 357A(1)
”
.
17
In section 357FA (incorporation of qualifying items), in subsection (2), for “357CC(2)” substitute “
357BH(2)
”
.
18
In section 357FB (tax advantage schemes) in subsection (4)(b) for “section 357A” substitute “
section 357A(1)
”
.
19
1
Section 357G (making an election under section 357A) is amended as follows.
2
In the heading, for “section 357A” substitute “
section 357A(1) or (11)(b)
”
.
3
In subsection (1) for “section 357A” substitute “
section 357A(1) or (11)(b)
”
.
20
1
Section 357GA (revocation of election made under section 357A) is amended as follows.
2
In the heading, for “section 357A” substitute “
section 357A(1)
”
.
3
In subsection (1) for “section 357A” substitute “
section 357A(1)
”
.
4
In subsection (5) for “section 357A” substitute “
section 357A(1)
”
.
21
1
Section 357GB (application of Part 8A in relation to partnerships) is amended as follows.
2
In subsection (11)—
a
in the words before paragraph (a), after “Sections” insert “
357BK, 357BKA
”
, and
b
in paragraph (a) after “section” insert “
357BK or
”
.
3
In subsection (12) for “section 357CB(1)(c)” substitute “
section 357BG(1)(c)
”
.
22
In section 357GC (application of Part 8A in relation to cost-sharing arrangements), in subsection (3), for “section 357CB(1)(c)” substitute “
section 357BG(1)(c)
”
.
23
1
Section 357GE (other interpretation) is amended as follows.
2
In subsection (1)—
a
at the appropriate place insert—
“payment” includes payment in money's worth.
b
omit the definition of “qualifying residual profit”.
3
After subsection (1) insert—
1A
In Chapters 3 and 4 of this Part “qualifying residual profit” of a trade, in relation to any accounting period, is the amount obtained by the application of Steps 1 to 4 in section 357C or (as the case may be) section 357DA in relation to the trade for the accounting period.
24
In Schedule 4 (index of defined expressions)—
a
for the entry for “finance income (in Part 8A)” substitute—
finance income (in Part 8A)
section 357BG
b
after the entry for “new consideration (in Part 23)” insert—
new entrant (in Part 8A)
section 357A(11)
c
in the entry for “qualifying residual profit of a trade (in Part 8A)”, in the left hand column, after “in” insert “
Chapters 3 and 4 of
”
, and
d
for the entry for “relevant IP income (in Part 8A)” substitute—
relevant IP income (in Part 8A)
section 357BH