Commentary on Sections Chapter 1: Nuclear Decommissioning Section 28: Taxation of NDA activities chargeable under Case VI of Schedule D
125.Section 28 confirms that the income generating activities of the NDA will be taxed under Case I of Schedule D, rather than Case VI of Schedule D, under section 18 of the Income and Corporation Taxes Act 1988 (c.1). This is being introduced in case the contractual relationships between the NDA and site licensee companies are such that the income generating activities of the NDA would be taxable under Case VI under the general tax rules. Taxing the income from significant activities, such as electricity generation, under Case VI would cause difficulties. This is because the tax sections in this Act have been drafted on the assumption that the NDA would be carrying on a trade for tax purposes, and Case VI does not have the comprehensive computational rules in the same way that Case I does.
126.Subsections (1) and (2) confirm that taxable activities carried out by the NDA when fulfilling its functions under section 3(1)(a), (d) or (e) are taxed under Case I, unless there is specific tax legislation (other than section 18 of the Income and Corporation Taxes Act 1988) to tax them under Case VI.
127.Subsections (3) and (4) provide for any activities to be treated together as part of the same trade or of another “real” trade being carried on by the NDA, unless specific tax legislation requires the activity to be treated as carried on as part of a separate trade.
128.Subsection (5) ties this section to the corporation tax legislation.