ANNEX 1:: MINOR CHANGES IN THE LAW MADE BY THE BILL The change in section 290(6)
R&D is covered by the deeming provision in paragraph 4(1) of Schedule 28B to ICTA:
“the carrying on of any activities of research and development from which it is intended there will be derived a trade … shall be treated as the carrying on of a qualifying trade.”
There are no requirements in this provision as to which company carries on the trade deriving from R&D.
Paragraph 3(9)(b)(i) of Schedule 28B to ICTA says (emphasis added):
“(9)Activities of a company or of any of its qualifying subsidiaries shall be disregarded for the purposes of sub-paragraphs (6) to (8) above to the extent that they consist in—(a)…(b)the holding and managing of property used by the company or any of its qualifying subsidiaries for the purposes of—(i)research and development from which it is intended that a qualifying trade to be carried on by the company or any of its qualifying subsidiaries will be derived; or …”
The provision is rewritten in section 290(5)(d) of this Act (with “a group company” instead of “the company or any of its qualifying subsidiaries” and with the impact of Change 41 which extends the R&D in the frame to R&D that will benefit a qualifying trade).
Section 290(6) of this Act provides an interpretation of group company (as defined in section 332), which makes it clear that here this includes future group companies:
“Any reference in sub-paragraph (i) or (ii) of subsection (5)(d) to a group company includes a reference to any existing or future company which will be a group company at any future time.”