Income and Corporation Taxes Act 1988

115 Provisions supplementary to section 114. U.K.

(1) F1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) F1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) F1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F2 (4) So long as a trade, profession or business is carried on by persons in partnership and any of those persons is a company which is not resident in the United Kingdom, section 114 shall have effect in relation to that company as if—

(a) the reference in subsection (1) to a company resident in the United Kingdom were a reference to a company that is not so resident; and

(b) in subsection (2), after “carried on” there were inserted “in the United Kingdom through a [F3 permanent establishment]”.

[F4 (5) Subsections (5A) and (5B) apply if—

(a) a company resident in the United Kingdom (“the resident partner”) is a member of a partnership which resides outside the United Kingdom or which carries on any trade, profession or business the control and management of which is situated outside the United Kingdom, and

(b) by virtue of any arrangements falling within section 788 (“the arrangements”) any of the income or capital gains of the partnership is relieved from corporation tax in the United Kingdom.

(5A) The arrangements do not affect any liability to corporation tax in respect of the resident partner's share of any income or capital gains of the partnership (and section 114 has effect accordingly).

(5B) If the resident partner's share of the income of the partnership consists of or includes a share in a qualifying distribution made by a company resident in the United Kingdom, the resident partner (and not the partnership) is, despite the arrangements, entitled to the share of the tax credit in respect of the distribution which corresponds to the partner's share of the distribution (and section 114 has effect accordingly).]]

[F5 (5C) For the purposes of subsections (5) to (5B) the members of a partnership include any company which is entitled to a share of income or capital gains of the partnership.]

(6) F1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) For the purposes of this section and section 114 “profits” shall not be taken as including chargeable gains.

Textual Amendments

F1 S. 115(1)-(3)(6) repealed (with effect in accordance with s. 215(4)(5) of the repealing Act) by Finance Act 1994 (c. 9), s. 215(3)(b), Sch. 26 Pt. 5(24), Note 4(a) (as s. 215(5) of that Act is modified (1.5.1995) by 1995 c. 4, s. 125(1)) (with Sch. 20)

F2 S. 115(4)(5) substituted (with effect in accordance with s. 125(1) of the amending Act) by Finance Act 1995 (c. 4), s. 125(5)

F3 Words in s. 115(4)(b) substituted (with effect in accordance with s. 153(4) of the amending Act) by Finance Act 2003 (c. 14), s. 153(1)(a)

F4 S. 115(5)-(5B) substituted for s. 115(5) (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. 95(2) (with Sch. 2)

F5 S. 115(5C) inserted (retrospectively) by Finance Act 2008 (c. 9), s. 58(1)(4)

Modifications etc. (not altering text)

C1 S. 115(5) modified (with retrospective effect) by Finance Act 2008 (c. 9), s. 58(5)(6)(b)