Income and Corporation Taxes Act 1988

536 Taxation of royalties where owner abroad. U.K.

M1 (1) Subject to the provisions of this section, where the usual place of abode of the owner of a copyright is not within the United Kingdom, section 349(1) shall apply to any payment of or on account of any royalties or sums paid periodically for or in respect of that copyright as it applies to annual payments not payable out of profits or gains brought into charge to income tax.

(2) In subsection (1) above—

• [F1 “copyright” does not include copyright in—

  (i)

  a cinematograph film or video recording, or

  (ii)

  the sound-track of such a film or recording, so far as it is not separately exploited; and]

• “owner of a copyright” includes a person who, notwithstanding that he has assigned a copyright to some other person, is entitled to receive periodical payments in respect of that copyright;

and the reference to royalties or sums paid periodically for or in respect of a copyright does not include royalties or sums paid in respect of copies of works which F2 . . . have been exported from the United Kingdom for distribution outside the United Kingdom.

(3) Subject to subsection (4) below, where any payment to which subsection (1) above applies is made through an agent resident in the United Kingdom and that agent is entitled as against the owner of the copyright to deduct any sum by way of commission in respect of services rendered, the amount of the payment shall for the purposes of section 349(1) be taken to be diminished by the sum which the agent is so entitled to deduct.

(4) Where the person by or through whom the payment is made does not know that any such commission is payable or does not know the amount of any such commission, any income tax deducted by or assessed and charged on him shall be computed in the first instance on, and the account to be delivered of the payment shall be an account of, the total amount of the payment without regard being had to any diminution thereof F3 . . . .

(5) The time of the making of a payment to which subsection (1) above applies shall, for all tax purposes, be taken to be the time when it is made by the person by whom it is first made and not the time when it is made by or through any other person.

(6) Any agreement for the making of any payment to which subsection (1) above applies in full and without deduction of income tax shall be void.

Textual Amendments

F1 Words in s. 536(2) substituted (1.8.1989) by Copyright, Designs and Patents Act 1988 (c. 48), Sch. 7 para. 36(5); S.I. 1989/816, art. 2

F2 Words in s. 536(2) repealed (with effect in accordance with s. 103(7) of the repealing Act) by Finance Act 1995 (c. 4), s. 115(10)(a), Sch. 29 Pt. 8(14), Note 2

F3 Words in s. 536(4) repealed (with effect in accordance with s. 103(7) of the repealing Act) by Finance Act 1995 (c. 4), s. 115(10)(b), Sch. 29 Pt. 8(14), Note 2

Modifications etc. (not altering text)

C1 See—1988 s.387—sums assessed under s.350by virtue of s.536not to be carried forward under s.387as trading losses.1988 s.821—under-deductions of tax from payments made before passing of annual Act.S.I. 1970 No.488 (under

“Double Taxation relief: general”

in Part III Vol.5) regns.2-10—payments exempt under double taxation agreements.

Marginal Citations

M1 Source-1970 s.391