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Finance Act 2006
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112Entry charge
(1)A company to which this Part applies shall be chargeable to corporation tax under Case VI of Schedule D on an amount of notional income calculated in accordance with subsection (3).
(2)The notional income shall be treated as arising to C (residual) on entry.
(3)The notional income is—
where—
(a)
arket Value means the aggregate market value of assets treated as sold and re-acquired under section 111(2) (ignoring any asset of negative market value), and
(b)
Tax Rate means the percentage rate at which C (residual) is chargeable to tax on profits.
(4)No loss, deficit, expense or allowance may be set off against notional income or tax arising under this section.
(5)The company may elect to have the notional income treated as arising in four instalments, the first on the date of entry and the other three on the first three anniversaries of that date; and for this purpose subsection (3) shall apply as if the percentage referred to were—
(a)0.50% for the first instalment,
(b)0.53% for the second instalment,
(c)0.56% for the third instalment, and
(d)0.60% for the fourth instalment.
(6)If a company makes an election under subsection (5)—
(a)notice of the election must be given to the Commissioners for Her Majesty’s Revenue and Customs with the notice under section 109,
(b)the election is irrevocable, and
(c)if this Part ceases to apply to a company before the third anniversary of entry, any remaining instalments shall become chargeable immediately.
(7)The Treasury may by regulations amend a percentage specified in subsection (5) in order to reflect a change in interest rates; but regulations under this subsection shall not have effect in relation to elections made before the regulations come into force.
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