Income Tax (Trading and Other Income) Act 2005

Chapter 4 Certain telecommunication rights: non-trading income

614 Charge to tax on certain telecommunication rights of a non-trader

(1) Income tax is charged on income derived from a relevant telecommunication right that is not used or held for the purposes of a trade, profession or vocation.

(2) “Relevant telecommunication right” has the same meaning as in Chapter 10 of Part 2 (see section 146).

615 Income charged

(1) Tax is charged under this Chapter on the full amount of the income arising in the tax year.

(2) See section 617 for provision about the calculation of the amount of certain income charged under this Chapter.

(3) This section is subject to Part 8 (foreign income: special rules).

616 Person liable

The person liable for any tax charged under this Chapter is the person receiving or entitled to the income.

617 Deductions in calculating certain income charged

(1) This section applies for calculating the amount of income charged under this Chapter other than annual payments.

(2) The following sections apply as they apply for the purpose of calculating the profits of a trade, profession or vocation—

(a) section 147 (expenditure and receipts in respect of relevant telecommunication rights treated as revenue in nature), and

(b) section 148 (credits or debits arising from revaluation in respect of relevant telecommunication rights).

(3) Expenses wholly and exclusively incurred for the purpose of generating the income are deductible.

(4) If an expense is incurred for more than one purpose, a deduction may be made for any identifiable part or identifiable proportion of the expense which is incurred wholly and exclusively for the purpose of generating the income.

(5) Expenses which would not have been allowable as a deduction in calculating the profits of a trade, if they had been incurred for its purposes, are not deductible under this section.

(6) Expenses for which any kind of relief is given under any other provision of the Income Tax Acts are not deductible under this section.

(7) The frequency with which payments are made is ignored in determining whether they are annual payments for the purposes of this Chapter.

618 Payments received after deduction of tax

Income tax deducted under either of the following sections from an annual payment within this Chapter is treated as income tax paid by the recipient—

• section 348(1)(b) of ICTA (under which income tax may be deducted from some payments by the payer), and

• section 349(1)(a) of ICTA (under which income tax must be deducted from some payments by the payer).