Finance Act 2011

ITA 2007 U.K.

18 U.K. ITA 2007 is amended as follows.

19 U.K. In section 879(1) (interest paid on advances from banks), insert at the end “ or is a bank that would be within the charge to corporation tax as respects the interest apart from section 18A of CTA 2009. ”

20 (1) Section 918 (manufactured dividends on UK shares: REITs) is amended as follows. U.K.

(2) After subsection (3) insert—

“(3A) But subsection (3) does not apply if—

(a) the manufactured dividend is paid by a UK resident company in the course of a trade carried on through a permanent establishment in a territory outside the United Kingdom, and

(b) section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is paid.”

(3) In subsection (4), for paragraphs (a) and (b) substitute—

“(a) is non-UK resident and pays the manufactured dividend otherwise than in the course of a trade carried on through a branch or agency in the United Kingdom, or

(b) is a UK resident company and pays the manufactured dividend in the course of a trade carried on through a permanent establishment in a territory outside the United Kingdom and section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is paid,”.

(4) After subsection (5) insert—

“(5A) But a UK resident is not a United Kingdom recipient if—

(a) it is a UK resident company which receives the manufactured dividend for the purposes of a trade carried on by the recipient through a permanent establishment in a territory outside the United Kingdom, and

(b) section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is received.”

21 U.K. In section 919 (manufactured interest on UK securities: payments by UK residents etc), after subsection (1) insert—

“(1A) But this section does not apply if—

(a) the manufactured interest is paid by a UK resident company in the course of a trade carried on through a permanent establishment in a territory outside the United Kingdom, and

(b) section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is paid.”

22 (1) Section 920 (foreign payers of manufactured interest: the reverse charge) is amended as follows. U.K.

(2) After subsection (1) insert—

“(1A) This section also applies if—

(a) a UK resident company pays manufactured interest in the course of a trade carried on through a permanent establishment in a territory outside the United Kingdom, and

(b) section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is paid.”

(3) After subsection (2) insert—

“(2A) But this section does not apply if—

(a) the recipient is a UK resident company which receives the manufactured interest for the purposes of a trade carried on by the recipient through a permanent establishment in a territory outside the United Kingdom, and

(b) section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is received.”

(4) In subsection (3), insert at the end “ and section 919(1A) did not apply. ”

23 U.K. In section 922 (manufactured overseas dividends: payments by UK residents etc), after subsection (1) insert—

“(1A) But this section does not apply if—

(a) the manufactured overseas dividend is paid by a UK resident company in the course of a trade carried on through a permanent establishment in a territory outside the United Kingdom, and

(b) section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is paid.”

24 (1) Section 923 (foreign payers of manufactured overseas dividends: the reverse charge) is amended as follows. U.K.

(2) After subsection (1) insert—

“(1A) This section also applies if—

(a) a UK resident company pays a manufactured overseas dividend in the course of a trade carried on through a permanent establishment in a territory outside the United Kingdom, and

(b) section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is paid.”

(3) After subsection (2) insert—

“(2A) But this section does not apply if—

(a) the recipient is a UK resident company which receives the manufactured overseas dividend for the purposes of a trade carried on by the recipient through a permanent establishment in a territory outside the United Kingdom, and

(b) section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is received.”

(4) In subsection (3), insert at the end “ and section 922(1A) did not apply. ”