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Amendment of section 448 (relief from corporation tax) of Principal Act.
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53.—(1) Section 448 of the Principal Act is amended—
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(a) by substituting the following for subsection (1):
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“(1)(a) For the purposes of this section, references to ‘charges on income paid for the purposes of the sale of goods’, where they are in the course of a trade in an accounting period, shall be taken to be such amount as would be the amount of the income from the sale of goods in that period if, notwithstanding subsection (4), the reference to ‘the company's income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise’ for the purposes of subsection (3), were to the amount of so much of the charges on income paid wholly and exclusively for the purposes of the trade in that period as appears to the inspector or on appeal to the Appeal Commissioners to be referable to charges on income paid for the purpose of the sale of goods and merchandise.
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(b) For the purposes of this section, references to a ‘loss from the sale of goods’, where they are in the course of a trade in an accounting period, shall be such amount as would be the amount of the income from the sale of goods in that period if, notwithstanding subsection (4), the reference to ‘the company's income for the relevant accounting period from the sale in the course of the trade mentioned in that subsection of goods and merchandise’ for the purposes of subsection (3), were to the amount of so much of the loss, computed as for the purposes of section 396(2), from the trade in the period as appears to the inspector or on appeal to the Appeal Commissioners to be referable to a loss incurred in the sale of goods and merchandise, but a loss such as is mentioned in section 407(4)(b) shall not be a loss from the sale of goods.
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(c) For the purposes of this section references to an ‘excess of charges on income paid for the purpose of the sale of goods’, where they are in the course of the trade in an accounting period, shall be so much of an amount, being the amount by which the charges on income paid by a company for the purpose of the sale of goods in the course of the trade in that period exceed the income from the sale of goods in the course of the trade in that period, as does not exceed the excess referred to in section 420(6) as computed for the company for that period.
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(d) (i) For the purposes of this section, ‘relevant corporation tax’ means the corporation tax which, apart from this section, sections 22A, 239, 241, 440, 441, 449, 644B and 827 and paragraphs 16 and 18 of Schedule 32, would be chargeable for the relevant accounting period exclusive of the corporation tax chargeable on the part of the company's profits attributable to chargeable gains for that period.
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(ii) For the purpose of subparagraph (i), the part of the company's profits attributable to chargeable gains for the relevant accounting period shall be taken to be the amount brought into the company's profits for that period for the purposes of corporation tax in respect of chargeable gains before any deduction for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description.”,
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(b) in subsection (3), by substituting the following for paragraph (b):
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“(b) then, deducting from the relevant sum—
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(i) the amount of any charges on income paid for the purposes of the sale of goods in the relevant accounting period,
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(ii) the amount of any loss from the sale of goods incurred by the company in the relevant accounting period, and
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(iii) the amount of any excess of charges on income paid for the purpose of the sale of goods or the amount of any loss from the sale of goods, incurred by a surrendering company and allowed under section 420A,
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allowed against income of the trade in the relevant accounting period.”,
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(c) in subsection (4)—
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(i) in paragraph (i) by deleting “or 454”,
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(ii) in paragraph (ii) by deleting “or 455”, and
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(iii) in paragraph (iii) by deleting “or 456”,
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and
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(d) in subsection (5A)(b) by deleting subparagraph (i).
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(2) This section applies as respects accounting periods ending on or after 3 February 2005.
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