xmlns:atom="http://www.w3.org/2005/Atom" xmlns:atom="http://www.w3.org/2005/Atom"
Modifications etc. (not altering text)
C1Pt. 18 modified (3.5.1994) by Finance Act 1994 (c. 9), Sch. 20 para. 10 (as amended by Finance Act 1995 (c. 4), s. 122(4)(5)) (with Sch. 20 para. 12(2)(a))
C2Pt. 18 applied (with effect in accordance with Sch. 29 Pt. 14 of the affecting Act) by Finance Act 2002 (c. 23), Sch. 29 para. 87
C3Pt. 18 modified (22.7.2004) by Finance Act 2004 (c. 12), s. 107(5)
C4Pt. 18 applied by Finance Act 1996 (c. 8), Sch. 9 para. 12E(5) (as inserted (29.11.2007 with effect in accordance with regs. 1(2), 3(1) of the amending S.I. (as amended by S.I. 2008/1579, reg. 4(1))) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), Sch. 1 para. 16)
C5Pt. 18 applied by Finance Act 2002 (c. 23), Sch. 26 para. 30E(5) (as inserted (29.11.2007 with effect in accordance with regs. 1(2), 3(1) of the amending S.I. (as amended by S.I. 2008/1579, reg. 4(1))) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), Sch. 1 para. 19)
C6Pt. 18 applied by Finance Act 1996 (c. 8), Sch. 9 para. 12C(3) (as substituted (29.11.2007 with effect in accordance with regs. 1(2), 3(2) of the amending S.I.) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), Sch. 2 para. 8)
C7Pt. 18 applied by Finance Act 2002 (c. 23), Sch. 26 para. 30C(3) (as substituted (29.11.2007 with effect in accordance with regs. 1(2), 3(2) of the amending S.I.) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), Sch. 2 para. 10)
C8Pt. 18 applied by Finance Act 2002 (c. 23), Sch. 29 para. 87A(3) (as substituted (29.11.2007 with effect in accordance with regs. 1(2), 3(2) of the amending S.I.) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), Sch. 2 para. 12)
C9Pt. 18 applied by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 140H(3), 140I(3), 140J(3) (as inserted (29.11.2007 with effect in accordance with regs. 1(2), 3(3) of the amending S.I. (as amended by S.I. 2008/1579, reg. 4(2))) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), Sch. 3 para. 1)
C10Pt. 18 applied by Finance Act 1996 (c. 8), Sch. 9 paras. 12H(3), 12I(3) (as inserted (29.11.2007 with effect in accordance with regs. 1(2), 3(3) of the amending S.I. (as amended by S.I. 2008/1579, reg. 4(2))) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), Sch. 3 para. 2)
C11Pt. 18 applied by Finance Act 2002 (c. 23), Sch. 26 paras. 30G(3), 30H(3) (as inserted (29.11.2007 with effect in accordance with regs. 1(2), 3(3) of the amending S.I. (as amended by S.I. 2008/1579, reg. 4(2))) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), Sch. 3 para. 4)
C12Pt. 18 applied by Finance Act 2002 (c. 23), Sch. 29 paras. 85B(3), 85C(3) (as inserted (29.11.2007 with effect in accordance with regs. 1(2), 3(3) of the amending S.I. (as amended by S.I. 2008/1579, reg. 4(2))) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), Sch. 3 para. 5)
C13Pt. 18: power to amend conferred (1.4.2009 with effect in accordance with s. 1329(1) of the affecting Act) by Corporation Tax Act 2009 (c. 4), s. 533(2)(3) (with Sch. 2 Pts. 1, 2)
C14Pt. 18 modified (with effect in accordance with s. 56(3) of the modifying Act) by Finance Act 2009 (c. 10), s. 56(1)
M1(1)In any case where—
(a)a person is treated under [F1section 628(5) of ITA 2007 as making accrued income profits in an interest period]; and
(b)assuming that, in the [F2tax year in which the accrued income profits are treated as made by virtue of section 617(2) of that Act], he were to become entitled to any interest on the securities concerned, he would be liable in respect of the interest to tax chargeable under [F3ITTOIA 2005 on relevant foreign income]; and
(c)he is liable under the law of a territory outside the United Kingdom to tax in respect of interest payable on the securities at the end of the interest period or he would be so liable if he were entitled to that interest,
credit of an amount equal to the relevant proportion of the [F4accrued income profits] shall be allowed against any United Kingdom income tax F5. . . computed by reference to the [F4accrued income profits], and shall be treated as if it were allowed under section 790(4).
In this subsection the relevant proportion is the rate of tax to which the person is or would be liable as mentioned in paragraph (c) above.
(2)In any case where—
(a)a person is entitled to credit against United Kingdom tax under section 790(4) or any corresponding provision of arrangements under section 788; and
(b)the tax is computed by reference to income consisting of interest which falls due on securities at the end of an interest period and [F6as respects which the person is entitled to an exemption from liability to income tax under section 679 of ITA 2007];
then the amount of that credit shall be a proportion of the amount it would be apart from this subsection, and the proportion is to be found by applying the formula—
where—
is the amount of the interest; and
[F7R is the amount of the exemption].
(3)M2Where the person entitled to the credit is an individual, subsection (2) above does not apply unless the interest arises from securities to which the person either became or ceased to be entitled during the interest period.
(4)Where section 811(1) applies to any income and, if credit were allowable in respect of it the credit would be reduced by virtue of subsection (2) above, section 811(1) shall have effect in relation to the income as if the reference to any sum paid in respect of tax on it were a reference to the amount which would be the amount of the credit if it were allowable and subsection (2) above applied.
[F8(5)Expressions used in this section and in Chapter 2 of Part 12 of ITA 2007 (accrued income profits) have the same meaning as in that Chapter.]
[F9(6)F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]
Textual Amendments
F1Words in s. 807(1)(a) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 198(2) (with Sch. 2)
F2Words in s. 807(1)(b) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 198(3) (with Sch. 2)
F3Words in s. 807(1)(b) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 325 (with Sch. 2)
F4Words in s. 807(1) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 198(4)(a) (with Sch. 2)
F5Words in s. 807(1) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 198(4)(b), Sch. 3 Pt. 1 (with Sch. 2)
F6Words in s. 807(2)(b) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 198(5) (with Sch. 2)
F7Words in s. 807(2) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 198(6) (with Sch. 2)
F8S. 807(5) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 198(7) (with Sch. 2)
F9S. 807(6) inserted (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 45 (with Sch. 15)
F10S. 807(6) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 198(8), Sch. 3 Pt. 1 (with Sch. 2)
Marginal Citations
M1Source—1985 Sch.23 37
M2Source—1988 Sch.23 38(1)-(3)
(1)This Part shall have effect for the purposes of corporation tax in relation to any company as if tax falling within subsection (2) below were to be disregarded.
(2)[F12Subject to subsection (2A) below,] tax falls within this subsection in relation to a company to the extent that it is—
(a)tax under the law of a territory outside the United Kingdom; and
(b)is attributable, on a just and reasonable apportionment,
[F13(i)]to interest accruing under a loan relationship at a time when the company is not a party to the relationship [F14; or
(ii)to so much of a [F15relevant payment] as, on such an apportionment, is attributable to a time when the company is not a party to [F16the derivative contract concerned]].
[F17(2A)Tax attributable to interest accruing to a company under a loan relationship does not fall within subsection (2) above if—
(a)at the time when the interest accrues, that company has ceased to be a party to that relationship by reason of having made the initial transfer under or in accordance with any repo or stock-lending arrangements relating to that relationship; and
(b)that time falls during the period for which those arrangements have effect.]
[F18(2B)F19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]
(3)F20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4)F21. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5)F22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6)F22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[F23[F24(6A)In this section “repo or stock-lending arrangements” means—
(a)a debtor repo within the meaning of [F25Chapter 10 of Part 6 of CTA 2009 (see section 548 of that Act)], or
(b)a stock lending arrangement within the meaning of section 263B of the 1992 Act.
(6B)In any case where a debtor repo within the meaning of that paragraph constitutes the repo or stock-lending arrangements—
(a)a reference in this section, in relation to those arrangements, to the initial transfer is to the sale mentioned in condition C of that paragraph; and
(b)a reference in this section, in relation to those arrangements, to the period for which they have effect is to the period from the making of the initial transfer until the earlier of the time when the subsequent purchase mentioned in condition D of that paragraph takes place and the time when it becomes apparent that that subsequent purchase will not take place.
(6C)In any case where a stock lending arrangement within the meaning of section 263B of the 1992 Act constitutes the repo or stock-lending arrangements—
(a)a reference in this section, in relation to those arrangements, to the initial transfer is to the transfer mentioned in subsection (1)(a) of that section; and
(b)a reference in this section, in relation to those arrangements, to the period for which they have effect is to the period from the making of the initial transfer until the earlier of the time when the transfer mentioned in subsection (1)(b) of that section takes place and the time when it becomes apparent that that transfer will not take place.]]
(7)In this section—
F26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[F27“relevant payment” means a payment the amount of which falls to be determined (wholly or mainly) by applying to a notional principal amount specified in a derivative contract, for a period so specified, a rate the value of which at all times is the same as that of a rate of interest so specified;]
[F28F29. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ] and
F26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]
Textual Amendments
F11S. 807A inserted (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 46 (with Sch. 15)
F12Words in s. 807A(2) inserted (with effect in accordance with s. 91(6) of the amending Act) by Finance Act 1997 (c. 16), s. 91(2)
F13Words in s. 807A(2)(b) renumbered as s. 807A(2)(b)(i) (with effect in accordance with Sch. 30 para. 24(4) of the amending Act) by virtue of Finance Act 2000 (c. 17), Sch. 30 para. 24(2)
F14S. 807A(2)(b)(ii) and preceding word inserted (with effect in accordance with Sch. 30 para. 24(4) of the amending Act) by Finance Act 2000 (c. 17), Sch. 30 para. 24(2)
F15Words in s. 807A(2)(b)(ii) substituted (with effect in accordance with s. 83(3) of the amending Act) by Finance Act 2002 (c. 23), Sch. 27 para. 12(2)(a) (with Sch. 28)
F16Words in s. 807A(2)(b)(ii) substituted (with effect in accordance with s. 83(3) of the amending Act) by Finance Act 2002 (c. 23), Sch. 27 para. 12(2)(b) (with Sch. 28)
F17S. 807A(2A) inserted (with effect in accordance with s. 91(6) of the amending Act) by Finance Act 1997 (c. 16), s. 91(3)
F18S. 807A(2B) inserted (with effect in accordance with Sch. 7 para. 5(3) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 5(2)
F19S. 807A(2B) omitted (22.4.2009) by virtue of Finance Act 2009 (c. 10), Sch. 24 paras. 9(a), 12
F20S. 807A(3) omitted (with effect in accordance with Sch. 22 para. 2(3) of the repealing Act) by virtue of Finance Act 2008 (c. 9), Sch. 22 para. 2(1)
F21S. 807A(4)(5)(b) repealed (19.7.2007) by Finance Act 2007 (c. 11), Sch. 10 para. 16(3)(g), Sch. 27 Pt. 2(10), Note
F22S. 807A(5)(6) omitted (with effect in accordance with Sch. 22 para. 2(3) of the repealing Act) by virtue of Finance Act 2008 (c. 9), Sch. 22 para. 2(2)(a)
F23S. 807A(6A) inserted (19.3.1997) by Finance Act 1997 (c. 16), s. 91(5)
F24S. 807A(6A)-(6C) substituted for s. 807A(6A) (with effect in accordance with S.I. 2007/2483, art. 4) by Finance Act 2007 (c. 11), Sch. 14 para. 10
F25Words in s. 807A(6A) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 256(3) (with Sch. 2 Pts. 1, 2)
F26S. 807A(7): definitions of "related transaction" and "trading credit" omitted (with effect in accordance with Sch. 22 para. 2(3) of the repealing Act) by virtue of Finance Act 2008 (c. 9), Sch. 22 para. 2(2)(a)
F27S. 807A(7): definition of "relevant payment" inserted (with effect in accordance with s. 83(3) of the amending Act) by Finance Act 2002 (c. 23), Sch. 27 para. 12(3) (with Sch. 28)
F28S. 807A(7): definition of "relevant qualifying payment" inserted (with effect in accordance with Sch. 30 para. 24(4) of the amending Act) by Finance Act 2000 (c. 17), Sch. 30 para. 24(3)
F29S. 807A(7): definition of "relevant qualifying payment" repealed (with effect in accordance with s. 83(3) of the repealing Act) by Finance Act 2002 (c. 23), Sch. 27 para. 12(4), Sch. 40 Pt. 3(13), Note (with Sch. 28)
Textual Amendments
F30S. 807B and preceding cross-heading inserted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 257 (with Sch. 2 Pts. 1, 2)
(1)Subject to subsections (4) to (6), section 807C applies if condition A or B is met.
(2)Condition A is that—
(a)a company resident in the United Kingdom transfers to a company resident in another member State the whole or part of a business which immediately before the transfer the transferor carried on in a member State other than the United Kingdom through a permanent establishment, and
(b)the transfer includes—
(i)the transfer of an asset or liability representing a loan relationship,
(ii)the transfer of rights and liabilities under a derivative contract, or
(iii)the transfer of intangible fixed assets that are chargeable intangible assets in relation to the transferor immediately before the transfer and in the case of one or more of which the proceeds of realisation exceed the costs recognised for tax purposes.
(3)Condition B is that—
(a)a company resident in the United Kingdom transfers part of its business to one or more companies,
(b)the part of the transferor's business which is transferred was carried on immediately before the transfer in a member State other than the United Kingdom through a permanent establishment,
(c)at least one transferee is resident in a member State other than the United Kingdom,
(d)the transferor continues to carry on a business after the transfer,
(e)the condition in subsection (2)(b) is met, and
(f)the transfer—
(i)is made in exchange for the issue of shares in or debentures of each transferee to each person holding shares in or debentures of the transferor, or
(ii)is not so made only because, and only so far as, a transferee is prevented from so issuing such shares or debentures by section 658 of the Companies Act 2006 (general rule against limited company acquiring own shares) or by a corresponding provision of the law of another member State preventing such an issue.
(4)If a transfer that meets condition A or B includes such a transfer as is mentioned in subsection (2)(b)(i), section 807C —
(a)only applies as respects the transfer so mentioned as a result of the transfer meeting condition A if the transfer is wholly or partly in exchange for shares or debentures issued by the transferee to the transferor, and
(b)only applies as respects the transfer so mentioned as a result of the transfer meeting condition B if each transferee is resident in a member State, but not necessarily the same one.
(5)If a transfer that meets condition A or B includes such a transfer as is mentioned in subsection (2)(b)(ii), section 807C—
(a)only applies as respects the transfer so mentioned as a result of the transfer meeting condition A if the transfer is wholly or partly in exchange for shares or debentures issued by the transferee to the transferor or to the persons holding shares in or debentures of the transferor,
(b)only applies as respects the transfer so mentioned as a result of the transfer meeting condition B if each transferee is resident in a member State, but not necessarily the same one, and
(c)only applies as respects the transfer so mentioned if the transferor makes a claim under this section in respect of it.
(6)If a transfer that meets condition A or B includes such a transfer as is mentioned in subsection (2)(b)(iii), section 807C—
(a)only applies as respects the transfer so mentioned as a result of the transfer meeting condition A if—
(i)the companies mentioned in subsection (2)(a) are companies incorporated under the law of a member State, and
(ii)the transfer is wholly or partly in exchange for shares or other securities issued by the transferee to the transferor,
(b)only applies as respects the transfer so mentioned as a result of the transfer meeting condition B if—
(i)the transferor and at least one of the transferees mentioned in subsection (3)(a) is a company so incorporated, and
(ii)the transfer is in exchange for shares or debentures issued by the transferee to the persons holding shares in or debentures of the transferor, and
(c)only applies as respects the transfer so mentioned if—
(i)the transfer includes the whole of the assets of the transferor used for the purposes of the business or part, or the whole of those assets other than cash, and
(ii)the transferor makes a claim under this section in respect of the transfer so mentioned.
(7)No claim may be made under subsection (6) in respect of a transfer in relation to which a claim is made under section 827 of CTA 2009 (claims to postpone charge on transfer of assets to non-UK resident company).
(8)For the purposes of this section, a company is resident in a member State if—
(a)it is within a charge to tax under the law of the State as being resident for that purpose, and
(b)it is not regarded, for the purpose of any double taxation relief arrangements to which the State is a party, as resident in a territory not within a member State.
(9)In this section and section 807C—
“company” means any entity listed as a company in the Annex to the Mergers Directive,
“derivative contract” has the same meaning as in Part 7 of CTA 2009,
“intangible fixed assets” and “chargeable intangible assets”, in relation to any person, have the same meaning as in Part 8 of CTA 2009,
“loan relationship” has the same meaning as in Part 5 of CTA 2009,
“the Mergers Directive” means Council Directive No. 90/434/EEC of 23 July 1990 on mergers, transfers etc,
“proceeds of realisation”, in relation to intangible fixed assets, has the meaning given in section 739 of CTA 2009, and
“recognised for tax purposes” has the same meaning as in Part 8 of CTA 2009.
(1)If tax would have been chargeable under the law of one or more other member States in respect of the transfer mentioned in section 807B(2)(b)(i), (ii) or (iii) but for the Mergers Directive, this Part, including any arrangements having effect by virtue of section 788, is to apply as if that tax had been chargeable.
(2)In calculating tax notionally chargeable under subsection (1), it is to be assumed—
(a)that to the extent permitted by the law of the other member State losses arising on the transfer mentioned in section 807B(2)(b)(i), (ii) or (iii) are set against gains arising on that transfer, and
(b)that any relief due to the transferor under that law is claimed.
(3)Subsection (1) does not apply if—
(a)the transfer of business mentioned in section 807B(2)(a) or (3)(a) is not effected for genuine commercial reasons, or
(b)that transfer of business forms part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoiding liability to corporation tax, capital gains tax or income tax.
(4)But subsection (3) does not prevent subsection (1) from applying if before the transfer—
(a)the appropriate applicant has applied to the Commissioners for Her Majesty's Revenue and Customs, and
(b)the Commissioners have notified the appropriate applicant that they are satisfied subsection (3) will not have that effect.
(5)In subsection (4) “the appropriate applicant” means—
(a)in a case where tax chargeable in respect of such a transfer as is mentioned in section 807B(2)(b)(i) or (ii) is concerned, the companies mentioned in section 807B(2)(a) or (3)(a), and
(b)in a case where tax chargeable in respect of such a transfer as is mentioned in section 807B(2)(b)(iii) is concerned, the transferor.
(6)Sections 427 and 428 of CTA 2009 (procedure and decisions on applications for clearance) have effect in relation to subsection (4) as in relation to section 426(2) of that Act, taking the references in section 428 to section 426(2)(b) as references to subsection (4)(b) of this section.]
Textual Amendments
F31S. 807C inserted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 258 (with Sch. 2 Pts. 1, 2)
Textual Amendments
F32S. 807D and preceding cross-heading inserted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 259 (with Sch. 2 Pts. 1, 2)
(1)Section 807E applies if—
(a)conditions A to E,
(b)in the case of a merger within subsection (2)(a), (b) or (c), condition F, and
(c)in the case of a merger within subsection (2)(c) or (d), condition G.
are met.
(2)Condition A is that—
(a)an SE is formed by the merger of two or more companies in accordance with Articles 2(1) and 17(2)(a) or (b) of Council Regulation (EC) No. 2157/2001 on the Statute for a European company (Societas Europaea),
(b)an SCE is formed by the merger of two or more co-operative societies, at least one of which is a society registered under the Industrial and Provident Societies Act 1965, in accordance with Articles 2(1) and 19 of Council Regulation (EC) No. 1435/2003 on the Statute for a European Co-operative Society (SCE),
(c)a merger is effected by the transfer by one or more companies of all their assets and liabilities to a single existing company, or
(d)a merger is effected by the transfer by two or more companies of all their assets and liabilities to a single new company (other than an SE or an SCE) in exchange for the issue by the transferee, to each person holding shares in or debentures of a transferor, of shares or debentures.
(3)Condition B is that each merging company is resident in a member State.
(4)Condition C is that the merging companies are not all resident in the same State.
(5)Condition D is that in the course of the merger a company resident in the United Kingdom (“company A”) transfers to a company resident in another member State all assets and liabilities relating to a business which company A carried on in a member State other than the United Kingdom through a permanent establishment (but see subsection (9)).
(6)Condition E is that the transfer mentioned in subsection (5) includes—
(a)the transfer of an asset or liability representing a loan relationship,
(b)the transfer of rights and liabilities under a derivative contract, or
(c)the transfer of intangible fixed assets—
(i)that are chargeable intangible assets in relation to company A immediately before the transfer, and
(ii)in the case of one or more of which the proceeds of realisation exceed the cost recognised for tax purposes.
(7)Condition F is that—
(a)the transfer of assets and liabilities to the transferee in the course of the merger is made in exchange for the issue of shares or debentures by the transferee to each person holding shares in or debentures of a transferor, or
(b)paragraph (a) is not met in relation to the transfer of those assets and liabilities only because, and only so far as, the transferee is prevented from so issuing such shares or debentures by section 658 of the Companies Act 2006 (general rule against limited company acquiring own shares) or by a corresponding provision of the law of another member State preventing such an issue.
(8)Condition G is that in the course of the merger each transferor ceases to exist without being in liquidation (within the meaning given by section 247 of the Insolvency Act 1986).
(9)In the case of a merger within subsection (2)(a) or (b), in determining whether section 807E applies in respect of such a transfer as is mentioned in subsection (6)(c), condition D is regarded as met even if all liabilities relating to the business which company A carried on are not transferred as mentioned in subsection (5).
(10)For the purposes of this section, a company is resident in a member State if—
(a)it is within a charge to tax under the law of the State as being resident for that purpose, and
(b)it is not regarded, for the purpose of any double taxation relief arrangements to which the State is a party, as resident in a territory not within a member State.
(11)In this section and section 807E—
“company” means any entity listed as a company in the Annex to the Mergers Directive,
“co-operative society” means a society registered under the Industrial and Provident Societies Act 1965 or a similar society governed by the law of a member State other than the United Kingdom,
“derivative contract” has the same meaning as in Part 7 of CTA 2009,
“intangible fixed assets” and “chargeable intangible assets”, in relation to any person, have the same meaning as in Part 8 of CTA 2009,
“loan relationship” has the same meaning as in Part 5 of CTA 2009,
“the Mergers Directive” means Council Directive No. 90/434/EEC of 23 July 1990 on mergers, transfers etc,
“proceeds of realisation”, in relation to intangible fixed assets, has the meaning given in section 739 of CTA 2009,
“recognised for tax purposes” has the same meaning as in Part 8 of CTA 2009,
“SE” and “SCE” have the same meaning as in CTA 2009 (see section 1319 of that Act)),
“the transferee” means—
in relation to a merger within subsection (2)(a), the SE,
in relation to a merger within subsection (2)(b), the SCE,
in relation to a merger within subsection (2)(c) or (d), the company to which assets and liabilities are transferred, and
“transferor” means—
in relation to a merger within subsection (2)(a), a company merging to form the SE,
in relation to a merger within subsection (2)(b), a co-operative society merging to form the SCE, and
in relation to a merger within subsection (2)(c) or (d), a company transferring all of its assets and liabilities.
(12)In section 807E, “company A”, “the merger” and “the merging companies” have the same meaning as in this section.
(1)If tax would have been chargeable under the law of one or more other member States in respect of the transfer mentioned in section 807D(6)(a), (b) or (c) but for the Mergers Directive, this Part, including any arrangements having effect by virtue of section 788, is to apply as if that tax had been chargeable.
(2)In calculating tax notionally chargeable under subsection (1) in respect of the transfer mentioned in section 807D(6)(a) or (b), it is to be assumed—
(a)that to the extent permitted by the law of the other member State losses arising on that transfer are set against gains arising on that transfer, and
(b)that any relief due to company A under that law is claimed.
(3)Subsection (1) does not apply if—
(a)the merger is not effected for genuine commercial reasons, or
(b)the merger forms part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoiding liability to corporation tax, capital gains tax or income tax.
(4)But subsection (3) does not prevent subsection (1) from applying if before the merger—
(a)any of the merging companies has applied to the Commissioners for Her Majesty's Revenue and Customs, and
(b)the Commissioners have notified the merging companies that they are satisfied subsection (3) will not have that effect.
(5)Sections 427 and 428 of CTA 2009 (procedure and decisions on applications for clearance) have effect in relation to subsection (4) as in relation to section 426(2) of that Act, taking the references in section 428 to section 426(2)(b) as references to subsection (4)(b) of this section.]
Textual Amendments
F33S. 807E inserted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 260 (with Sch. 2 Pts. 1, 2)
Textual Amendments
F34S. 807F and preceding cross-heading inserted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 261 (with Sch. 2 Pts. 1, 2)
(1)Section 807G applies if, as a result of—
(a)a relevant loan relationship transaction,
(b)a relevant derivative contracts transaction, or
(c)a relevant intangible fixed assets transaction,
tax would have been chargeable under the law of a member State other than the United Kingdom in respect of a relevant profit but for the Mergers Directive.
(2)In this section “relevant loan relationship transaction” means—
(a)a transfer of a kind which meets condition A or B in section 421 of CTA 2009 or would meet one of those conditions if—
(i)the business or part of the business transferred were carried on by the transferor in the United Kingdom, and
(ii)the condition in section 421(3)(c) or (4)(f) of that Act were met,
and in relation to which the transferor or transferee or one of the transferees is a transparent entity, or
(b)a merger of a kind mentioned in section 431(2) of that Act which meets—
(i)conditions B to D in section 431,
(ii)in the case of a merger within section 431(3)(a), (b) or (c), condition E in section 431, and
(iii)in the case of a merger within section 431(3)(c) or (d), condition F in section 431,
and in relation to which one or more of the merging companies is a transparent entity.
(3)In this section “relevant derivative contracts transaction” means—
(a)a transfer of a kind which meets condition A or B in section 674 of CTA 2009 or would meet one of those conditions if—
(i)the business or part of the business transferred were carried on by the transferor in the United Kingdom, and
(ii)the condition in section 674(2)(c) or (3)(f) of that Act were met,
and in relation to which the transferor is a transparent entity, or
(b)a merger of a kind mentioned in section 682(2) of that Act which meets—
(i)conditions B to D in section 682,
(ii)in the case of a merger within section 682(2)(a), (b) or (c), condition E in section 682, and
(iii)in the case of a merger within section 682(2)(c) or (d), condition F in section 682,
and in relation to which one or more of the merging companies is a transparent entity.
(4)In this section “relevant intangible fixed assets transaction” means—
(a)a transfer—
(i)which is of a kind which meets condition A or B in section 819 of CTA 2009, or would meet one of those conditions if the business or part of the business transferred were carried on by the transferor in the United Kingdom, and
(ii)in relation to which the transferor or transferee or one of the transferees is a transparent entity, or
(b)a merger—
(i)which is of a kind mentioned in section 821(2) of that Act,
(ii)which meets conditions B and C in section 821,
(iii)which, if it is a merger within section 821(2)(a), (b) or (c), meets condition D in section 821,
(iv)which, if it is a merger within section 821(2)(c) or (d), meets condition E in section 821,
(v)in the course of which no qualifying assets are transferred to which section 818 (company reconstruction involving transfer of business) applies, and
(vi)in relation to which one or more of the merging companies is a transparent entity.
(5)In this section “relevant profit” means—
(a)in the case of a transfer within subsection (2)(a), a profit accruing to a transparent entity in respect of a loan relationship (or which would be treated as accruing if it were not transparent) because of the transfer of assets or liabilities representing a loan relationship by the transparent entity to the transferee,
(b)in the case of a merger within subsection (2)(b), a profit accruing to a transparent entity in respect of a loan relationship (or which would be treated as accruing if it were not transparent) because of the transfer of assets or liabilities representing a loan relationship by the transparent entity to another company in the course of the merger,
(c)in the case of a transfer within subsection (3)(a), a profit accruing to a transparent entity in respect of a derivative contract (or which would be treated as accruing if it were not transparent) because of the transfer of rights and liabilities under the derivative contract by the transparent entity to the transferee,
(d)in the case of a merger within subsection (3)(b), a profit accruing to a transparent entity in respect of a derivative contract (or which would be treated as accruing if it were not transparent) because of the transfer of rights and liabilities under the derivative contract by the transparent entity to another company in the course of the merger,
(e)in the case of a transfer within subsection (4)(a), a profit which would be treated as accruing to a transparent entity in respect of an intangible fixed asset, because of the transfer of intangible fixed assets by the transparent entity, if it were not transparent,
(f)in the case of a merger within subsection (4)(b), a profit which would be treated as accruing to a transparent entity in respect of an intangible fixed asset, because of the transfer of intangible fixed assets by the transparent entity in the course of the merger, if it were not transparent.
(6)In this section and section 807G—
“company” means any entity listed as a company in the Annex to the Mergers Directive,
“derivative contract” has the same meaning as in Part 7 of CTA 2009,
“intangible fixed assets” has the same meaning as in Part 8 of CTA 2009,
“loan relationship” has the same meaning as in Part 5 of CTA 2009,
“the Mergers Directive” means Council Directive No. 90/434/EEC of 23 July 1990 on mergers, transfers etc, and
“transparent entity” means a company which is resident in a member State other than the United Kingdom and does not have an ordinary share capital.
(1)This Part, including any arrangements having effect by virtue of section 788, is to apply as if the tax that would have been chargeable as mentioned in section 807F(1) had been chargeable.
(2)In calculating tax notionally chargeable under subsection (1), it is assumed—
(a)that to the extent permitted by the law of the other member State mentioned in section 807F(1) losses arising on the relevant transfer are set against profits arising on it, and
(b)that any relief available under that law is claimed.
(3)In this section “the relevant transfer” means—
(a)the transfer of assets or liabilities mentioned in paragraph (a) or (b) of section 807F(5),
(b)the transfer of rights and liabilities mentioned in paragraph (c) or (d) of that section, or
(c)the transfer of intangible fixed assets mentioned in paragraph (e) or (f) of that section.]
Textual Amendments
F35S. 807G inserted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 262 (with Sch. 2 Pts. 1, 2)
M3In the case of a person not resident in the United Kingdom who carries on in the United Kingdom [F36a business], receipts of interest [F37, dividend or royalties] which have been treated as tax-exempt under arrangements having effect by virtue of section 788 are not to be excluded from trading income or profits of the business so as to give rise to losses to be set off (under section 393 [F38393A(1)] or [F39436A]) against income or profits.
Textual Amendments
F36Words in s. 808 substituted (with effect in accordance with s. 140(2) of the amending Act) by Finance Act 1994 (c. 9), s. 140(1)(a)
F37Words in s. 808 substituted (with effect in accordance with s. 140(2) of the amending Act) by Finance Act 1994 (c. 9), s. 140(1)(b)
F38Words in s. 808 inserted by Finance Act 1991 (c. 31, SIF 63:1), s. 73(3)(4)(5), Sch. 15 para.21
F39Words in s. 808 substituted (with effect in accordance with s. 38(2) of the amending Act) by Finance Act 2007 (c. 11), Sch. 7 para. 54 (with Sch. 7 Pt. 2)
F40Words in s. 808 repealed (with effect in accordance with s. 140(2) of the repealing Act) by Finance Act 1994 (c. 9), s. 140(1)(c), Sch. 26 Pt. 5(18), Note
Marginal Citations
M3Source—1976 s.50(1)
(1)Subsection (2) below applies where any arrangements having effect by virtue of section 788—
(a)make provision, whether for relief or otherwise, in relation to interest (as defined in the arrangements), and
(b)make provision (the special relationship provision) that where owing to a special relationship the amount of the interest paid exceeds the amount which would have been paid in the absence of the relationship, the provision mentioned in paragraph (a) above shall apply only to the last-mentioned amount.
(2)The special relationship provision shall be construed as requiring account to be taken of all factors, including—
(a)the question whether the loan would have been made at all in the absence of the relationship,
(b)the amount which the loan would have been in the absence of the relationship, and
(c)the rate of interest and other terms which would have been agreed in the absence of the relationship.
(3)The special relationship provision shall be construed as requiring the taxpayer to show that there is no special relationship or (as the case may be) to show the amount of interest which would have been paid in the absence of the special relationship.
(4)In a case where—
(a)a company makes a loan to another company with which it has a special relationship, and
(b)it is not part of the first company’s business to make loans generally,
the fact that it is not part of the first company’s business to make loans generally shall be disregarded in construing subsection (2) above.
(5)Subsection (2) above does not apply where the special relationship provision expressly requires regard to be had to the debt on which the interest is paid in determining the excess interest (and accordingly expressly limits the factors to be taken into account).]
Textual Amendments
F41S. 808A inserted (16.7.1992 with application in relation to interest paid after 14.5.1992) by Finance (No. 2) Act 1992 (c. 48), s.52
Modifications etc. (not altering text)
C15S. 808A(2)-(4) applied (with effect in accordance with s. 97(5)(6) of the affecting Act) by Finance Act 2004 (c. 12), s. 103 (with s. 106)
C16S. 808A(2)-(4) applied (6.4.2005 with effect in accordance with s. 883(1) of the affecting Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 764 (with Sch. 2)
(1)Subsection (2) below applies where any arrangements having effect by virtue of section 788—
(a)make provision, whether for relief or otherwise, in relation to royalties (as defined in the arrangements), and
(b)make provision (the special relationship provision) that where owing to a special relationship the amount of the royalties paid exceeds the amount which would have been paid in the absence of the relationship, the provision mentioned in paragraph (a) above shall apply only to the last-mentioned amount.
(2)The special relationship provision shall be construed as requiring account to be taken of all factors, including—
(a)the question whether the agreement under which the royalties are paid would have been made at all in the absence of the relationship,
(b)the rate or amounts of royalties and other terms which would have been agreed in the absence of the relationship, and
(c)where subsection (3) below applies, the factors specified in subsection (4) below.
(3)This subsection applies if the asset in respect of which the royalties are paid, or any asset which that asset represents or from which it is derived, has previously been in the beneficial ownership of—
(a)the person who is liable to pay the royalties,
(b)a person who is, or has at any time been, an associate of the person who is liable to pay the royalties,
(c)a person who has at any time carried on a business which, at the time when the liability to pay the royalties arises, is being carried on in whole or in part by the person liable to pay those royalties, or
(d)a person who is, or has at any time been, an associate of a person who has at any time carried on such a business as is mentioned in paragraph (c) above.
(4)The factors mentioned in subsection (2)(c) above are—
(a)the amounts which were paid under the transaction, or under each of the transactions in the series of transactions, as a result of which the asset has come to be an asset of the beneficial owner for the time being,
(b)the amounts which would have been so paid in the absence of a special relationship, and
(c)the question whether the transaction or series of transactions would have taken place in the absence of such a relationship.
(5)The special relationship provision shall be construed as requiring the taxpayer to show—
(a)the absence of any special relationship, or
(b)the rate or amount of royalties that would have been payable in the absence of the relationship,
as the case may be.
(6)The requirement on the taxpayer to show in accordance with subsection (5)(a) above the absence of any special relationship includes a requirement—
(a)to show that no person of any of the descriptions in paragraphs (a) to (d) of subsection (3) above has previously been the beneficial owner of the asset in respect of which the royalties are paid, or of any asset which that asset represents or from which it is derived, or
(b)to show the matters specified in subsection (7) below,
as the case may be.
(7)Those matters are—
(a)that the transaction or series of transactions mentioned in subsection (4)(a) above would have taken place in the absence of a special relationship, and
(b)the amounts which would have been paid under the transaction, or under each of the transactions in the series of transactions, in the absence of such a relationship.
(8)Subsection (2) above does not apply where the special relationship provision expressly requires regard to be had to the use, right or information for which royalties are paid in determining the excess royalties (and accordingly expressly limits the factors to be taken into account).
(9)For the purposes of this section one person (“person A”) is an associate of another person (“person B”) at a given time if—
(a)person A was, within the meaning of Schedule 28AA, directly or indirectly participating in the management, control or capital of person B at that time, or
(b)the same person was or same persons were, within the meaning of Schedule 28AA, directly or indirectly participating in the management, control or capital of person A and person B at that time.]
Textual Amendments
F42S. 808B inserted (with effect in accordance with Sch. 30 para. 25(2) of the amending Act) by Finance Act 2000 (c. 17), Sch. 30 para. 25(1)
Modifications etc. (not altering text)
C17S. 808B(2)-(7)(9) applied (with effect in accordance with s. 97(5)(6) of the affecting Act) by Finance Act 2004 (c. 12), s. 103 (with s. 106)
C18S. 808B(2)-(7)(9) applied (6.4.2005 with effect in accordance with s. 883(1) of the affecting Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 764 (with Sch. 2)
M4(1)In any case where—
(a)[F43income tax is treated under section 494 of ITA 2007 as having been paid in relation to a payment made by the trustees of a settlement] and the income arising under the [F44settlement] includes any taxed overseas income, and
(b)the trustees certify that—
(i)the income out of which the payment was made was or included taxed overseas income of an amount and from a source stated in the certificate, and
(ii)that amount arose to them not earlier than six years before the end of the year of assessment in which the payment was made;
then the person to whom the payment was made may claim that the payment, up to the amount so certified, shall be treated for the purposes of this Part as income received by him from that source and so received in the year in which the payment was made.
(2)In subsection (1) above “taxed overseas income”, in relation to any [F44settlement], means income in respect of which the trustees are entitled to credit for overseas tax under this Part.
Textual Amendments
F43Words in s. 809(1)(a) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 199 (with Sch. 2)
F44Words in s. 809(1)(a)(2) substituted (6.4.2006) by Finance Act 2006 (c. 25), Sch. 13 paras. 24(b), 27(1)
Marginal Citations
M4Source—1973 s.18
F45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F45S. 810 repealed (with effect in accordance with Sch. 30 para. 26(2) of the repealing Act) by Finance Act 2000 (c. 17), Sch. 30 para. 26(1), Sch. 40 Pt. 2(13), Note
M5(1)For the purposes of the Tax Acts, the amount of any income arising in any place outside the United Kingdom shall, subject to subsection (2) below, be treated as reduced by any sum which has been paid in respect of tax on that income in the place where the income has arisen (that is to say, tax payable under the law of a territory outside the United Kingdom).
(2)Subsection (1) above—
(a)shall not apply to income the tax on which is to be computed by reference to the amount of income received in the United Kingdom; F46. . . [F47and]
(b)F48. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F49(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[F50(d)shall not require any income to be treated as reduced by an amount of underlying tax which, by virtue of section 799(1B)(b), falls to be left out of account for the purposes of section 799;]
and this section has effect subject to section 795(2) [F51and to section 111 of the Finance Act 2004 (computation of income subject to special withholding tax)].
[F52(3)This section has effect for the purposes of corporation tax notwithstanding anything in [F53—
(a)][F54section 464(1) of CTA 2009] (matters to be brought into account in the case of loan relationships only under [F54Part 5] of that Act) [F55; or
(b)[F56section 906(1) of CTA 2009] (matters to be brought into account in respect of intangible fixed assets only under [F56Part 8 of that Act]).]]
[F57(3A)If—
(a)income of any person (“P”) is treated under subsection (1) as reduced by a sum paid in respect of tax on that income in the place where the income has arisen (“foreign tax”), and
(b)a payment is made by a tax authority to P, or any person connected with P, by reference to the foreign tax,
the amount of P's income is to be increased by an amount equal to the payment made to P or the connected person.
(3B)Section 839 applies for the purposes of determining whether or not a person is connected with P.]
[F58(4)Where the amount by which any income is treated under subsection (1) above as reduced is rendered excessive or insufficient by reason of any adjustment of the amount of any tax payable either—
(a)in the United Kingdom, or
(b)under the law of any other territory,
[F59or the amount of P's income is increased under subsection (3A),] nothing in the Tax Acts limiting the time for the making of assessments or claims for relief shall apply to any assessment or claim to which the [F60adjustment or increase gives rise], being an assessment or claim made not later than six years from the time when [F61all such assessments, adjustments, increases] and other determinations have been made, whether in the United Kingdom or elsewhere, as are material in determining whether any and if so what reduction under subsection (1) above falls to be treated as made [F62or increase under subsection (3A) falls to be made].
(5)Subject to subsection (7) below, where—
(a)the amount of any income of a person is treated under subsection (1) above as reduced by any sum, and
(b)the amount of that reduction is subsequently rendered excessive by reason of an adjustment of the amount of any tax payable under the law of a territory outside the United Kingdom [F63or an increase under subsection (3A)],
that person shall give notice in writing to an officer of the Board that an adjustment [F64or increase] has been made that has rendered the amount of the reduction excessive.
(6)A notice under subsection (5) above must be given within one year from the time of the making of the adjustment [F65or increase].
(7)Subsections (5) and (6) above do not apply where the adjustment [F65or increase] is one whose consequences in relation to the reduction fall to be given effect to in accordance with regulations made under—
(a)section 182(1) of the M6Finance Act 1993 (regulations relating to individual members of Lloyd’s); or
(b)section 229 of the M7Finance Act 1994 (regulations relating to corporate members of Lloyd’s).
(8)A person who fails to comply with the requirements imposed on him by subsections (5) and (6) above in relation to any adjustment [F65or increase] shall be liable to a penalty of an amount not exceeding the amount of the difference specified in subsection (9) below.
(9)The difference is that between—
(a)the amount of tax payable by the person in question for the relevant chargeable period, after giving effect to the reduction that ought to be made under subsection (1) above; and
(b)the amount that would have been the tax so payable after giving effect instead to a reduction under that subsection of the amount rendered excessive as mentioned in subsection (5)(b) above.
(10)For the purposes of subsection (9) above “the relevant chargeable period” means the chargeable period as respects which the reduction was treated as made.]
Textual Amendments
F46Word preceding s. 811(2)(b) repealed (with effect in accordance with Sch. 27 para. 6(3) of the repealing Act) by Finance Act 2001 (c. 9), Sch. 27 para. 6(2)(a), Sch. 33 Pt. 2(8), Note
F47Word at the end of s. 811(2)(a) inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 200(a) (with Sch. 2)
F48S. 811(2)(b) and word repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 200(b), Sch. 3 Pt. 1 (with Sch. 2)
F49S. 811(2)(c) and preceding word repealed (with effect as mentioned in s. 103(3)(4) of the amending Act) by 1993 c. 34, ss. 103(2)(g)(3)(4), 213, Sch. 23 Pt. III(9)
F50S. 811(2)(d) inserted (with effect in accordance with Sch. 27 para. 6(3) of the amending Act) by Finance Act 2001 (c. 9), Sch. 27 para. 6(2)(c)
F51Words in s. 811(2) inserted (22.7.2004) by Finance Act 2004 (c. 12), s. 284(1), s. 115(2)
F52S. 811(3) inserted (with effect in accordance with s. 105(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 14 para. 47 (with Sch. 15)
F53Words in s. 811(3) renumbered as s. 811(3)(a) (24.7.2002) by virtue of Finance Act 2002 (c. 23), Sch. 30 para. 5(5)
F54Words in s. 811(3)(a) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 263(a) (with Sch. 2 Pts. 1, 2)
F55S. 811(3)(b) and preceding word inserted (24.7.2002) by Finance Act 2002 (c. 23), Sch. 30 para. 5(5)
F56Words in s. 811(3)(b) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 263(b) (with Sch. 2 Pts. 1, 2)
F57S. 811(3A)(3B) inserted (with effect in accordance with s. 59(13) of the amending Act) by Finance Act 2009 (c. 10), s. 59(9)
F58S. 811(4)-(10) inserted (with effect in accordance with Sch. 30 para. 27(3) of the amending Act) by Finance Act 2000 (c. 17), Sch. 30 para. 27(2)
F59Words in s. 811(4) inserted (with effect in accordance with s. 59(13) of the amending Act) by Finance Act 2009 (c. 10), s. 59(10)(a)
F60Words in s. 811(4) substituted (with effect in accordance with s. 59(13) of the amending Act) by Finance Act 2009 (c. 10), s. 59(10)(b)
F61Words in s. 811(4) substituted (with effect in accordance with s. 59(13) of the amending Act) by Finance Act 2009 (c. 10), s. 59(10)(c)
F62Words in s. 811(4) inserted (with effect in accordance with s. 59(13) of the amending Act) by Finance Act 2009 (c. 10), s. 59(10)(d)
F63Words in s. 811(5)(b) inserted (with effect in accordance with s. 59(13) of the amending Act) by Finance Act 2009 (c. 10), s. 59(11)(a)
F64Words in s. 811(5) inserted (with effect in accordance with s. 59(13) of the amending Act) by Finance Act 2009 (c. 10), s. 59(11)(b)
F65Words in s. 811(6)(7)(8) inserted (with effect in accordance with s. 59(13) of the amending Act) by Finance Act 2009 (c. 10), s. 59(12)
Marginal Citations
M5Source—1970 s.516; 1973 s.40(1); 1987 Sch.15 2(19)
Prospective
M8(1)In any case where—
(a)a company has, or is an associated company of a company which has, a qualifying presence in a unitary state, and
(b)at any time when it or its associated company has such a qualifying presence, the company is entitled by virtue of arrangements having effect under [F66section 2(1) of TIOPA 2010] to a tax credit in respect of qualifying distributions made to it by companies which are resident in the United Kingdom which is equal to one half of the tax credit to which an individual resident in the United Kingdom would be entitled in respect of such distributions,
then, notwithstanding anything to the contrary in the arrangements, the company shall not be entitled to claim under [F67section 397(2)(a) of ITTOIA 2005] to have that tax credit set against the income tax chargeable on its income for the year of assessment in which the distribution is made [F68nor, by virtue of section 30(9) of the Finance (No. 2) Act 1997, where] the credit exceeds that income tax, to have the excess paid to it.
(2)M9In this section and sections 813 and 814, “unitary state” means a province, state or other part of a territory outside the United Kingdom [F69in relation to] which the arrangements referred to in subsection (1) above have been made which, in taxing the income or profits of companies from sources within that province, state or other part, takes into account, or is entitled to take into account, income, receipts, deductions, outgoings or assets of such companies, or associated companies of such companies, arising, expended or situated, as the case may be, outside that territory and which has been prescribed under subsection (6) below as a unitary state for the purposes of this subsection.
(3)M10A company shall be treated as having a qualifying presence in a unitary state if it is a member of a group and, in any period for which members of the group make up their accounts ending after the relevant date, 7½ per cent. or more in value of the property, payroll or sales of such members situated in, attributable to or derived from the territory outside the United Kingdom, of which that state is a province, state or other part, are situated in, attributable to or derived from that state.
(4)For the purposes of subsection (3) above—
(a)[F707½ per cent. or more in value of such property, payroll or sales as are referred to in that subsection shall be treated as being situated in, attributable to or derived from the state there referred to, unless, on making any claim under section 231(3), the claimant proves otherwise to the satisfaction of the Board; and]
(b)the value of the property, payroll or sales of a company shall be taken to be the value as shown in its accounts for the period in question and for this purpose the value of any property consisting of an interest in another member of the group or of any sales made to another such member shall be disregarded.
(5)M11Except where the context otherwise requires, in this section and sections 813 to 815—
(a)“arrangements” means the arrangements referred to in subsection (1) above;
(b)“group” and “member of a group” shall be construed in accordance with section 272(1) of the 1970 Act with the omission of the restriction in paragraph (a) of that subsection and the substitution of the words “ 51 per cent. ” for the words “75 per cent.” wherever they occur;
[F71(c)whether a person is connected with another is determined in accordance with [F72section 1122 of CTA 2010];]
[F73(d)sections 449 to 451 of CTA 2010 apply but with the substitution in section 449 of “6 years” for “12 months”.]
(e)“the relevant date” means the earliest of the following dates—
(i)the date on which this section comes into force;
(ii)the earliest date on which a distribution could have been made in relation to which the provisions of this section and sections 813 and 814 are applied by an order under this section;
(iii)the earliest date on which a distribution could have been made in relation to which the provisions of section 54 of the Finance Act 1985 were applied by an order under that section.
(6)M12The Treasury may by order prescribe those provinces, states or other parts of a territory outside the United Kingdom which are to be treated as unitary states for the purposes of subsection (2) above, but no province, state or other part of such a territory shall be so prescribed which only takes into account such income, receipts, deductions, outgoings or assets as are mentioned in that subsection—
(a)if the associated company was incorporated under the law of the territory; or
(b)for the purposes of granting relief in taxing dividends received by companies.
(7)The Treasury may by order prescribe that for subsections (3) and (4) above (or for those subsections as they have effect at any time) there shall be substituted [F74either the following subsection—
“(3)A company shall be treated as having a qualifying presence in a unitary state if it is liable in such a state to a tax charged on its income or profits by whatever name called for any period ending after the relevant date for which that state charges tax.”;
or the following subsections—
“(3)A company shall be treated as having a qualifying presence in a unitary state if it has its principal place of business in such a state at any time after the relevant date.
(4)For the purposes of subsection (3) above the principal place of business of a company shall include both the place where central management and control of the company is exercised and the place where the immediate day-to-day management of the company as a whole is exercised.”].
(8)M13The provisions of this section and sections 813 to 815 shall come into force on such date as the Treasury may by order appoint and the Treasury may in the order prescribe that those provisions shall apply in relation to distributions made, in accounting periods ending after 5th April 1988, before the date on which the order is made.
(9)M14No order shall be made under this section unless a draft of it has been laid before and approved by a resolution of the House of Commons.
Textual Amendments
F66Words in s. 812(1)(b) substituted (1.4.2010 with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 30 (with Sch. 9)
F67Words in s. 812(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 326(a) (with Sch. 2)
F68Words in s. 812(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 326(b) (with Sch. 2)
F69Words in s. 812(2) substituted (with effect in accordance with s. 88(3) of the amending Act) by Finance Act 2002 (c. 23), s. 88(2)(a)
F70S. 812(4)(a) repealed (with effect in accordance with s. 134(2) of the repealing Act) by Finance Act 1996 (c. 8), Sch. 20 para. 38(2), Sch. 41 Pt. 5(10), Note
F71S. 812(5)(c) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 201 (with Sch. 2)
F72Words in s. 812(5)(c) substituted (1.4.2010 with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), Sch. 1 para. 116(a) (with Sch. 2)
F73S. 812(5)(d) substituted (1.4.2010 with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), Sch. 1 para. 116(b) (with Sch. 2)
F74Words in s. 812(7) substituted (with effect in accordance with s. 134(2) of the amending Act) by Finance Act 1996 (c. 8), Sch. 20 para. 38(3)
Marginal Citations
M8Source—1985 s.54(1),(3)
M9Source—1985 s.54(6) Sch.13 5
M10Source—1985 s.54(4),(5)
M11Source—1985 s.54(6) Sch.13 5.
M12Source—1985 s.54(7)(b), Sch.13 5(1)
M13Source—1985 s.54(7)(a)
M14Source—1985 s.54(8)
M8(1)In any case where—
(a)a company has, or is an associated company of a company which has, a qualifying presence in a unitary state, and
(b)at any time when it or its associated company has such a qualifying presence, the company is entitled by virtue of arrangements having effect under section 788(1) to a tax credit in respect of qualifying distributions made to it by companies which are resident in the United Kingdom which is equal to one half of the tax credit to which an individual resident in the United Kingdom would be entitled in respect of such distributions,
then, notwithstanding anything to the contrary in the arrangements, the company shall not be entitled to claim under [F67section 397(2)(a) of ITTOIA 2005] to have that tax credit set against the income tax chargeable on its income for the year of assessment in which the distribution is made [F68nor, by virtue of section 30(9) of the Finance (No. 2) Act 1997, where] the credit exceeds that income tax, to have the excess paid to it.
(2)M9In this section and sections 813 and 814, “unitary state” means a province, state or other part of a territory outside the United Kingdom [F69in relation to] which the arrangements referred to in subsection (1) above have been made which, in taxing the income or profits of companies from sources within that province, state or other part, takes into account, or is entitled to take into account, income, receipts, deductions, outgoings or assets of such companies, or associated companies of such companies, arising, expended or situated, as the case may be, outside that territory and which has been prescribed under subsection (6) below as a unitary state for the purposes of this subsection.
(3)M10A company shall be treated as having a qualifying presence in a unitary state if it is a member of a group and, in any period for which members of the group make up their accounts ending after the relevant date, 7½ per cent. or more in value of the property, payroll or sales of such members situated in, attributable to or derived from the territory outside the United Kingdom, of which that state is a province, state or other part, are situated in, attributable to or derived from that state.
(4)For the purposes of subsection (3) above—
(a)[F707½ per cent. or more in value of such property, payroll or sales as are referred to in that subsection shall be treated as being situated in, attributable to or derived from the state there referred to, unless, on making any claim under section 231(3), the claimant proves otherwise to the satisfaction of the Board; and]
(b)the value of the property, payroll or sales of a company shall be taken to be the value as shown in its accounts for the period in question and for this purpose the value of any property consisting of an interest in another member of the group or of any sales made to another such member shall be disregarded.
(5)M11Except where the context otherwise requires, in this section and sections 813 to 815—
(a)“arrangements” means the arrangements referred to in subsection (1) above;
(b)“group” and “member of a group” shall be construed in accordance with section 272(1) of the 1970 Act with the omission of the restriction in paragraph (a) of that subsection and the substitution of the words “ 51 per cent. ” for the words “75 per cent.” wherever they occur;
[F71(c)whether a person is connected with another is determined in accordance with section 839;]
(d)section 416 applies with the substitution of the words “ six years ” for “one year” in subsection (1); and
(e)“the relevant date” means the earliest of the following dates—
(i)the date on which this section comes into force;
(ii)the earliest date on which a distribution could have been made in relation to which the provisions of this section and sections 813 and 814 are applied by an order under this section;
(iii)the earliest date on which a distribution could have been made in relation to which the provisions of section 54 of the Finance Act 1985 were applied by an order under that section.
(6)M12The Treasury may by order prescribe those provinces, states or other parts of a territory outside the United Kingdom which are to be treated as unitary states for the purposes of subsection (2) above, but no province, state or other part of such a territory shall be so prescribed which only takes into account such income, receipts, deductions, outgoings or assets as are mentioned in that subsection—
(a)if the associated company was incorporated under the law of the territory; or
(b)for the purposes of granting relief in taxing dividends received by companies.
(7)The Treasury may by order prescribe that for subsections (3) and (4) above (or for those subsections as they have effect at any time) there shall be substituted [F74either the following subsection—
“(3)A company shall be treated as having a qualifying presence in a unitary state if it is liable in such a state to a tax charged on its income or profits by whatever name called for any period ending after the relevant date for which that state charges tax.”;
or the following subsections—
“(3)A company shall be treated as having a qualifying presence in a unitary state if it has its principal place of business in such a state at any time after the relevant date.
(4)For the purposes of subsection (3) above the principal place of business of a company shall include both the place where central management and control of the company is exercised and the place where the immediate day-to-day management of the company as a whole is exercised.”].
(8)M13The provisions of this section and sections 813 to 815 shall come into force on such date as the Treasury may by order appoint and the Treasury may in the order prescribe that those provisions shall apply in relation to distributions made, in accounting periods ending after 5th April 1988, before the date on which the order is made.
(9)M14No order shall be made under this section unless a draft of it has been laid before and approved by a resolution of the House of Commons.
Textual Amendments
F67Words in s. 812(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 326(a) (with Sch. 2)
F68Words in s. 812(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 326(b) (with Sch. 2)
F69Words in s. 812(2) substituted (with effect in accordance with s. 88(3) of the amending Act) by Finance Act 2002 (c. 23), s. 88(2)(a)
F70S. 812(4)(a) repealed (with effect in accordance with s. 134(2) of the repealing Act) by Finance Act 1996 (c. 8), Sch. 20 para. 38(2), Sch. 41 Pt. 5(10), Note
F71S. 812(5)(c) substituted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 201 (with Sch. 2)
F74Words in s. 812(7) substituted (with effect in accordance with s. 134(2) of the amending Act) by Finance Act 1996 (c. 8), Sch. 20 para. 38(3)
Marginal Citations
M8Source—1985 s.54(1),(3)
M9Source—1985 s.54(6) Sch.13 5
M10Source—1985 s.54(4),(5)
M11Source—1985 s.54(6) Sch.13 5.
M12Source—1985 s.54(7)(b), Sch.13 5(1)
M13Source—1985 s.54(7)(a)
M14Source—1985 s.54(8)
Prospective
M15(1)Where—
(a)section 812 applies so as to withdraw the entitlement of a company to claim to have a tax credit in respect of a qualifying distribution set against the income tax chargeable on its income and to have the excess of the credit over that income tax paid to it; and
(b)the company (“the recipient company”) has either had that excess paid to it, or has received an additional amount in accordance with arrangements made under Regulation 2(1) of the M16Double Taxation Relief (Taxes on Income) (General) (Dividend) Regulations 1973;
the recipient company shall be liable to a fine for the violation of the provisions of section 812 equal to twice the amount of the excess or the additional amount, as the case may be.
(2)Any fine payable under subsection (1) above—
(a)shall be payable to the Board;
(b)shall be treated as having become payable at the date when the excess or additional amount was paid to the recipient company; and
(c)may be recovered in accordance with subsections (3) to (7) below;
and any such fine is referred to below as “the recoverable amount”.
(3)The recoverable amount may be assessed and recovered as if it were unpaid tax and section 30 of the Management Act (recovery of overpayment of tax etc.) shall apply accordingly.
(4)Any amount which may be assessed and recovered as if it were unpaid tax by virtue of this section shall carry interest at the rate of 9 per cent. per annum from the date when it was payable in accordance with subsection (1) above until the date it is paid.
(5)It is hereby declared that this section applies to a recoverable amount which is paid without the making of an assessment (but is paid after it is due) and that, where the recoverable amount is charged by any assessment (whether or not any part of it has been paid when the assessment is made), this section applies in relation to interest running before, as well as after, the making of the assessment.
(6)Where the recoverable amount is not paid by the recipient company within six months from the date on which it became payable—
(a)the recoverable amount may at any time within six years from the date on which it became payable be assessed and recovered as if it were unpaid tax due from any person who—
(i)is or was at any time prior to the expiration of that six year period connected with the recipient company, or
(ii)would have been connected on the assumption that all the facts and circumstances relating to the recipient company at the time the excess or additional amount, as the case may be, was paid continued to apply for six years thereafter,
and section 30 of the Management Act shall apply accordingly; and
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F75(7)Where a recoverable amount is assessed and recovered from a person connected with the recipient company in accordance with subsection (6)(a) above, that person shall be liable for the interest payable in accordance with subsection (4) above, and until the interest is so paid, subsection (6)(b) above shall apply as if the words “ the interest due in accordance with subsection (4) above is paid ” were substituted for the words “the recoverable amount is paid in accordance with the provisions of this section”.
(8)Interest payable under this section shall be paid without any deduction of income tax and shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes.
(9)Where under the law in force in a territory outside the United Kingdom interest is payable subject to a deduction in respect of taxation and such deduction applies to an amount of interest paid in accordance with subsection (4) above, the reference to the rate of 9 per cent. per annum in that subsection shall be deemed to be a reference to such rate of interest as after such deduction shall be equal to the rate of 9 per cent. per annum.
Textual Amendments
F75S. 813(6)(b) repealed (with effect in accordance with Sch. 3 para. 37(3) of the repealing Act) by Finance Act 1998 (c. 36), Sch. 3 para. 37(2), Sch. 27 Pt. 3(2), Note
Modifications etc. (not altering text)
C19 Reproduced in Part III Vol.5.
Marginal Citations
M15Source—1985 Sch.13 1
Prospective
M17(1)In any case where arrangements are made, whether before or after the coming into force of this section, as a result of which interest is paid or a discount is allowed by or through a person who is resident in the United Kingdom, or carries on business in the United Kingdom through a branch or agency, and it is reasonable to suppose that, if such payment or allowance had not been made, a qualifying distribution would have been made by that person, or by another company resident in the United Kingdom to a company which has, or is an associated company of a company which has, a qualifying presence in a unitary state at the time when the payment or allowance is made, then—
(a)no person who receives that payment or allowance shall be entitled to relief from income tax or corporation tax thereon by virtue of arrangements having effect under [F76section 2(1) of TIOPA 2010]; and
(b)the payment or allowance shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes.
(2)Without prejudice to the generality of subsection (1) above, where a payment or allowance is not of itself a payment or allowance to which that subsection applies, but is made in conjunction with other payments of whatever nature and taken together with those payments has substantially similar effect to a distribution, then, for the purposes of subsection (1) above it shall be treated as a payment or allowance within that subsection.
(3)Any company which has received such a payment of interest as is referred to in subsection (1) above, from which income tax has not been deducted by the person making the payment, and has a qualifying presence in a unitary state at the time of the payment, shall be treated for the purposes of section 813 as a company—
(a)from which the entitlement to claim payment of the excess of a tax credit over the income tax chargeable on its income has been withdrawn by section 812(1), and
(b)which has had paid to it such an excess in an amount equal to the income tax which should have been deducted from the payment of interest.
Textual Amendments
F76Words in s. 814(1)(a) substituted (1.4.2010 with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), Sch. 8 para. 31 (with Sch. 9)
Modifications etc. (not altering text)
C20S. 814(1) modified (with effect in accordance with s. 153(4) of the modifying Act) by Finance Act 2003 (c. 14), s. 153(2)(a)
Marginal Citations
M17Source-1985 Sch. 13 3
M17(1)In any case where arrangements are made, whether before or after the coming into force of this section, as a result of which interest is paid or a discount is allowed by or through a person who is resident in the United Kingdom, or carries on business in the United Kingdom through a branch or agency, and it is reasonable to suppose that, if such payment or allowance had not been made, a qualifying distribution would have been made by that person, or by another company resident in the United Kingdom to a company which has, or is an associated company of a company which has, a qualifying presence in a unitary state at the time when the payment or allowance is made, then—
(a)no person who receives that payment or allowance shall be entitled to relief from income tax or corporation tax thereon by virtue of arrangements having effect under section 788(1); and
(b)the payment or allowance shall not be allowed as a deduction in computing any income, profits or losses for any tax purposes.
(2)Without prejudice to the generality of subsection (1) above, where a payment or allowance is not of itself a payment or allowance to which that subsection applies, but is made in conjunction with other payments of whatever nature and taken together with those payments has substantially similar effect to a distribution, then, for the purposes of subsection (1) above it shall be treated as a payment or allowance within that subsection.
(3)Any company which has received such a payment of interest as is referred to in subsection (1) above, from which income tax has not been deducted by the person making the payment, and has a qualifying presence in a unitary state at the time of the payment, shall be treated for the purposes of section 813 as a company—
(a)from which the entitlement to claim payment of the excess of a tax credit over the income tax chargeable on its income has been withdrawn by section 812(1), and
(b)which has had paid to it such an excess in an amount equal to the income tax which should have been deducted from the payment of interest.
Modifications etc. (not altering text)
C20S. 814(1) modified (with effect in accordance with s. 153(4) of the modifying Act) by Finance Act 2003 (c. 14), s. 153(2)(a)
Marginal Citations
M17Source-1985 Sch. 13 3
Prospective
M18Where it appears to the Board that the provisions of sections 812 to 814 may apply to a company resident outside the United Kingdom (“the foreign parent”), the Board may, by notice given to the foreign parent or any associated company of the foreign parent, require that company within such time (not being less than 30 days) as may be specified in the notice to make available for inspection any books, accounts or other documents or records whatsoever of that company where in the opinion of the Board it is proper that they should inspect such documents for the purposes of ascertaining whether those provisions apply to the foreign parent or such associated company notwithstanding that in the opinion of the person to whom the notice is given those provisions do not apply to that company or any associated company of that company.
Marginal Citations
M18Source—1985 Sch.13 4(1)
(1)This section applies where section 269C of the 1970 Act or section 140C [F78or 140F] of the Taxation of Chargeable Gains Act 1992 applies; and references in this section to company A, the transfer and the trade shall be construed accordingly.
[F79(2)Where gains accruing to company A on the transfer would have been chargeable to tax under the law of the relevant member State but for the Mergers Directive, this Part, including any arrangements having effect by virtue of section 788, shall apply as if the amount of tax, calculated on the required basis, which would have been payable under that law in respect of the gains so accruing but for that Directive, were tax payable under that law.]
(5)For the purposes of this section, the required basis is that—
(a)so far as permitted under the law of the relevant member State, any losses arising on the transfer are set against any gains so arising, and
(b)any relief available to company A under that law has been duly claimed.
(6)In this section—
“the Mergers Directive” means the Directive of the Council of the European Communities dated 23rd July 1990 on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different member States (no. 90/434/EEC);
“relevant member State” means the member State in which, immediately before the time of the transfer, company A carried on the trade through a [F80permanent establishment].]
Textual Amendments
F77S. 815A inserted (16.7.1992) by Finance (No. 2) Act 1992 (c. 48), s. 50
F78Words in s. 815A(1) inserted (20.7.2005) by Finance (No. 2) Act 2005 (c. 22), s. 59(1)
F79S. 815A(2) substituted for s. 815A(2)-(4) (with effect in accordance with s. 134(2) of the amending Act) by Finance Act 1996 (c. 8), Sch. 20 para. 39
F80Words in s. 815A(6) substituted (with effect in accordance with s. 153(4) of the amending Act) by Finance Act 2003 (c. 14), s. 153(1)(a)
Modifications etc. (not altering text)
C21S. 815A applied (retrospectively) by Taxation of Chargeable Gains Act 1992 (c. 12), s. 140C(5) (as inserted (retrospectively) by Finance (No. 2) Act 1992 (c. 48), s. 45)
S. 815A applied (retrospectively) by Income and Corporation Taxes Act 1970 (c. 10), s. 269C(5) (as inserted (retrospectively) by Finance (No. 2) Act 1992 (c. 48), s. 48)
C22S. 815A applied by Taxation of Chargeable Gains Act 1992 (c. 12), s. 140F(4) (as substituted (29.11.2007 with effect in accordance with reg. 3 of the affecting S.I.) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), reg. 1(2), Sch. 2 para. 2)
(1)Where arrangements having effect under section 788 make the provision mentioned in subsection (2) (however expressed), that provision does not prevent income of a person resident in the United Kingdom being chargeable to income tax or corporation tax.
(2)The provision is that the profits of an enterprise which is resident outside the United Kingdom, or carries on a trade, profession or business the control or management of which is situated outside the United Kingdom, are not to be subject to United Kingdom tax except in so far as they are attributable to a permanent establishment of the enterprise in the United Kingdom.
(3)A person is resident in the United Kingdom for the purposes of this section if the person is so resident for the purposes of the arrangements having effect under section 788.
[F82(4)This section does not apply in relation to—
(a)income of a person resident in the United Kingdom to which section 858 of ITTOIA 2005 applies, or
(b)income of a company resident in the United Kingdom to which section 1266 of CTA 2009 applies.]]
Textual Amendments
F81S. 815AZA inserted (with effect in accordance with s. 59(2) of the amending Act) by Finance Act 2008 (c. 9), s. 59(1)
F82S. 815AZA(4) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 264 (with Sch. 2 Pts. 1, 2)
(1)Where, under and for the purposes of arrangements made [F84in relation to] a territory outside the United Kingdom and having effect under section 788—
(a)a case is presented to the Board, or to an authority in that territory, by a person concerning his being taxed (whether in the United Kingdom or that territory) otherwise than in accordance with the arrangements; and
(b)the Board arrives at a solution to the case or makes a mutual agreement with an authority in that territory for the resolution of the case,
subsections (2) and (3) below have effect.
(2)The Board shall give effect to the solution or mutual agreement, notwithstanding anything in any enactment; and any such adjustment as is appropriate in consequence may be made (whether by way of discharge or repayment of tax, the allowance of credit against tax payable in the United Kingdom, the making of an assessment or otherwise).
(3)A claim for relief under any provision of the Tax Acts may be made in pursuance of the solution or mutual agreement at any time before the expiration of the period of 12 months following the notification of the solution or mutual agreement to the person affected, notwithstanding the expiration of the time limited by any other enactment for making the claim.
(4)Where arrangements having effect under section 788 include provision for a person to present a case to the Board concerning his being taxed otherwise than in accordance with the arrangements, subsections (5) and (6) below have effect.
(5)The presentation of any such case under and in accordance with the arrangements—
(a)does not constitute a claim for relief under the Tax Acts; and
(b)is accordingly not subject to section 42 of the Management Act or any other enactment relating to the making of such claims.
(6)Any such case must be presented before the expiration of—
(a)the period of 6 years following the end of the chargeable period to which the case relates; or
(b)such longer period as may be specified in the arrangements.]
Textual Amendments
F83S. 815AA inserted (with effect in accordance with Sch. 30 para. 28(2)(3) of the amending Act) by Finance Act 2000 (c. 17), Sch. 30 para. 28(1)
F84Words in s. 815AA(1) substituted (with effect in accordance with s. 88(3) of the amending Act) by Finance Act 2002 (c. 23), s. 88(2)(a)
(1)Subsection (2) below applies if the Arbitration Convention requires the Board to give effect to—
(a)an agreement or decision, made under the Convention by the Board (or their authorised representative) and any other competent authority, on the elimination of double taxation, or
(b)an opinion, delivered by an advisory commission set up under the Convention, on the elimination of double taxation.
(2)The Board shall give effect to the agreement, decision or opinion notwithstanding anything in any enactment; and any such adjustment as is appropriate in consequence may be made (whether by way of discharge or repayment of tax, the making of an assessment or otherwise).
(3)Any enactment which limits the time within which claims for relief under any provision of the Tax Acts may be made shall not apply to a claim made in pursuance of an agreement, decision or opinion falling within subsection (1)(a) or (b) above.
(4)In this section “the Arbitration Convention” means the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises, concluded on 23rd July 1990 by the parties to the treaty establishing the European Economic Community (90/436/EEC).]
Textual Amendments
F85S. 815B inserted (16.7.1992) by Finance (No. 2) Act 1992 (c. 48), s. 51(1)
F88. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]
Textual Amendments
F86S. 815C inserted (28.7.2000) by Finance Act 2000 (c. 17), s. 146(1)
F87Word in s. 815C sidenote substituted (with effect in accordance with s. 88(3) of the amending Act) by Finance Act 2002 (c. 23), s. 88(2)(b)
F88S. 815C repealed (19.7.2006) by Finance Act 2006 (c. 25), Sch. 26 Pt. 8(2)
M19(1)Where under the law in force in any territory outside the United Kingdom provision is made for the allowance, in respect of the payment of United Kingdom income tax or corporation tax, of relief from tax payable under that law, the obligation as to secrecy imposed by the Tax Acts upon [F89Revenue and Customs officials] shall not prevent the disclosure to the authorised officer of the [F90authorities] of the territory in question of such facts as may be necessary to enable the proper relief to be given under that law.
Section 790(12) shall apply for the interpretation of this subsection as it applies for the interpretation of that section.
(2)F91. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[F92(2ZA)F91. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]
[F93(2A)The obligation as to secrecy imposed by any enactment shall not prevent the Board, or any authorised [F94Revenue and Customs official], from disclosing information required to be disclosed under the Arbitration Convention in pursuance of a request made by an advisory commission set up under that Convention; and “the Arbitration Convention” here has the meaning given by section 815B(4).]
(3)Where a person beneficially entitled to income from any securities as defined by section 24 of the Management Act (information as to income from securities) is resident in a territory to which arrangements having effect under section 788 with respect to income tax or corporation tax relate, section 24(3) of that Act shall not exempt any bank [F95(within the meaning of that subsection)] from the duty of disclosing to the Board particulars relating to the income of that person.
[F96(3A)F97. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]
(4)The obligation as to secrecy imposed by any enactments with regard to income tax or corporation tax shall not prevent the disclosure, to any authorised officer of any country to which a declaration made under section 514 of the 1970 Act (agreements about shipping etc.) relates, of such facts as may be necessary to enable relief to be duly given in accordance with the arrangements specified in the declaration.
[F98(5)In this section “Revenue and Customs official” has the same meaning as in section 18 of the Commissioners for Revenue and Customs Act 2005 (confidentiality).]
Textual Amendments
F89Words in s. 816(1) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 37(a); S.I. 2005/1126, art. 2(2)(h)
F90Word in s. 816(1) substituted (with effect in accordance with s. 88(3) of the amending Act) by Finance Act 2002 (c. 23), s. 88(2)(c)
F91S. 816(2)(2ZA) repealed (19.7.2006) by Finance Act 2006 (c. 25), Sch. 26 Pt. 8(2)
F92S. 816(2ZA) inserted (28.7.2000) by Finance Act 2000 (c. 17), s. 146(2)
F93S. 816(2A) inserted (16.7.1992) by Finance (No. 2) Act 1992 (c. 48), s. 51(2)
F94Words in s. 816(2)(2ZA)(2A) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 37(b); S.I. 2005/1126, art. 2(2)(h)
F95Words in s. 816(3) inserted (6.4.2007 with effect in accordance with s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 202(a) (with Sch. 2)
F96S. 816(3A) inserted (with effect in accordance with Sch. 37 para. 9 of the amending Act) by Finance Act 1996 (c. 8), Sch. 37 para. 2(1)(2)(d)
F97S. 816(3A) repealed (6.4.2007 with effect in accordance with s. 1034(1) of the repealing Act) by Income Tax Act 2007 (c. 3), Sch. 1 para. 202(b), Sch. 3 Pt. 1 (with Sch. 2)
F98S. 816(5) added (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 37(c); S.I. 2005/1126, art. 2(2)(h)
Modifications etc. (not altering text)
C23 See 1979(C) s.10(4)—application to capital gains tax.
S. 816 applied (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 277(4), 289 (with ss. 60, 101(1), 171, 201(3))
S. 816 applied (27.7.1993) by 1993 c. 34, s. 194(5)
Marginal Citations
M19Source—1970 s.518; 1972 s.100(1)