(1)Subject to [subsection (2) below and F1] section [43 F2] of the principal Act (Schedule A etc.) a person not resident in the United Kingdom, whether a British subject or not, shall be assessable and chargeable to income tax in the name of any such trustee, guardian, tutor, curator or committee as is mentioned in section 72 of this Act, or of any branch or agent, whether the branch or agent has the receipt of the profits or gains or not, in like manner and to the like amount as such non-resident person would be assessed and charged if he were resident in the United Kingdom and in the actual receipt of such profits or gains .
F3[(2)Subject to the following provisions of this section, a person who is not resident in the United Kingdom shall not, by virtue of this section, be chargeable in the name of an agent in respect of profits or gains arising from investment transactions carried out by the agent if—
(a)the agent is carrying on a business of providing investment management services to a number of clients of whom the non-resident person is one; and
(b)the investment transactions concerned were carried out in the ordinary course of the business referred to in paragraph (a) above; and
(c)the remuneration which the agent receives for the provision of investment management services to the non-resident person is at a rate which is not less than that which is customary for that class of business; and
(d)in the case of profits or gains which are chargeable to tax as the profits or income of the non-resident person from carrying on a trade in the United Kingdom through a branch or agency, the agent carrying out the investment transaction is also the agency through which the trade is carried on;
and in the case of an agent who provides investment management services as part only of a business, paragraphs (a) to (d) above shall apply as if that part were a separate business.
(3)In subsection (2) above “investment transactions” means—
[F4(a)transactions in shares, stock, futures contracts, options contracts or securities of any description not mentioned in this paragraph, but excluding futures contracts or options contracts relating to land,]
(b)transactions on a recognised futures exchange, within the meaning of the [F51992 Act], and
(c)the placing of money at interest,
and for the purposes of that subsection an agent carries out such a transaction on behalf of his client whether he undertakes the transaction himself or by giving instructions to another person.
F6[(3A)For the purposes of subsection (3) above a contract is not prevented from being a futures contract or an options contract by the fact that any party is or may be entitled to receive or liable to make, or entitled to receive and liable to make, only a payment of a sum (as opposed to a transfer of assets other than money) in full settlement of all obligations.]
(4 )F7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5)Subsection (2) above does not apply if the non-resident person and the agent are connected with each other, within the terms of section [839 F8] of the principal Act.]
Textual Amendments
F1Finance Act 1985 s.50for 1985—86et seq. for profits or gains chargeable to income tax and for accounting periods ending on or after1April1985for profits etc. chargeable to corporation tax.
F2Income and Corporation Taxes Act 1988 (c. 1), Sch. 29 para. 32.
F3S. 78(2)-(5) inserted by Finance Act 1985 (c. 54), s. 50for1985—86 et seq. for profits or gains chargeable to income tax and for accounting periods ending on or after1April1985for profits etc. chargeable to corporation tax.
F4S. 78(3)(a) substituted (25.7.1991) by Finance Act 1991 (c. 31),, s. 81(2)(5)
F5Words in s. 78(3)(b) substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) of the substituting Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch. 10 para. 2(2) (with ss. 60, 101(1), 171, 201(3)).
F6S. 78(3A) inserted (25.7.1991) by Finance Act 1991 (c. 31),, s. 81(3)(5)
F7S. 78(4) repealed (25.7.1991) by Finance Act 1991 (c. 31),, ss. 81(4)(5), 123, Sch. 19 Pt. V Note 1.
F8Income and Corporation Taxes Act 1988 (c. 1), Sch. 29 para. 32.
Modifications etc. (not altering text)
C1 See Income and Corporation Taxes Act 1988 (c. 1), s. 43—s. 78not applicable to tax on profits within Sch. A,or in certain cases Sch. D Case VI,where payment made direct to person whose usual place of abode is outside the United Kingdom.
A non-resident person shall be assessable and chargeable to income tax in respect of any profits or gains arising, whether directly or indirectly, through or from any branch or agency, and shall be so assessable and chargeable in the name of the branch or agent.
(1)Where it appears to the inspector or, on appeal, to the General or Special Commissioners, that the true amount of the profits or gains of any non-resident person chargeable with income tax in the name of a resident person cannot in any case be readily ascertained, the inspector or Commissioners may, if he or they think fit, assess and charge the non-resident person on a percentage of the turnover of the business done by the non-resident person through or with the resident person in whose name he is chargeable as aforesaid, and the inspector may by notice require the resident person to deliver a return of the business so done by the non-resident person through or with the resident person.
(2)The amount of percentage under subsection (1) of this section shall in each case be determined, having regard to the nature of the business, by the inspector or Commissioners.
(3)If either the resident person or the non-resident person is dissatisfied with the percentage as confirmed or determined by the General or Special Commissioners on appeal, he may within four months of the determination, require the Commissioners to refer the question of the percentage to a referee or board of referees to be appointed for the purpose by the Treasury and the decision of the referee or board shall be final and conclusive.
Modifications etc. (not altering text)
C2 See Finance Act 1989 s. 182 (in Part II Vol. 5)—disclosure of information.
Where a non-resident person is chargeable to income tax in the name of any branch or agent in respect of any profits or gains arising from the sale of goods or produce manufactured or produced out of the United Kingdom by the non-resident person, the person in whose name the non-resident person is so chargeable may, by notice included in a return of income delivered within six years from the end of the year of assessment for which he is chargeable, elect to be assessed in respect of those profits or gains on the basis of the profits which might reasonably be expected to have been earned by a merchant or, where the goods are retailed by or on behalf of the manufacturer or producer, by a retailer of the goods sold, who had bought from the manufacturer or producer direct.
(1)Nothing in this Part of this Act shall render a non-resident person chargeable in the name of a broker or in the name of an agent not being an authorised person carrying on the regular agency of the non-resident person, in respect of profits or gains arising from sales or transactions carried out through such a broker or agent:
Provided that where sales or transactions are carried out on behalf of a non-resident person through a broker in the ordinary course of his business as such and the broker—
(a)is a person carrying on bona fide the business of a broker in the United Kingdom, and
(b)receives in respect of the business of the non-resident person which is transacted through him remuneration at a rate not less than that customary in the class of business in question, then, notwithstanding that the broker is a person who acts regularly for the non-resident person as such broker, the non-resident person shall not be chargeable in the name of that broker in respect of profits or gains arising from those sales or transactions.
In this subsection, “broker” includes a general commission agent.
(2)The fact that a non-resident person executes sales or carries out transactions with other non-residents which would make him chargeable in pursuance of this Part of this Act in the name of a resident person shall not of itself make him chargeable in respect of profits arising from those sales or transactions .
Modifications etc. (not altering text)
C3 SeeCapital Gains Tax Act 1979 (c. 14), s.12(3)— “branch or agency”
in Capital Gains Tax Act 1979 (capital gains)excludes person exempt unders.82.
(1)A person in whose name a non-resident person is chargeable shall be answerable for all matters required to be done under the Income Tax Acts for the purpose of assessment and payment of income tax.
(2)A person who has been charged under the Income Tax Acts in respect of any non-resident person as aforesaid may retain, out of money coming into his hands on behalf of any such person, so much thereof from time to time as is sufficient to pay the tax charged, and shall be indemnified for all such payments made in pursuance of the Income Tax Acts .
Modifications etc. (not altering text)
C4 SeeFinance Act 1981 s.134and Sch.17 para.18—application of this section to the special tax on banking deposits.
(1)A non-resident person shall be assessable and chargeable to capital gains tax in respect of any chargeable gains arising, whether directly or indirectly, through or from any branch or agency, and shall be so assessable and chargeable in the name of the branch or agent.
M1(2)The person in whose name the non-resident person is chargeable shall be answerable for all matters required to be done under the enactments relating to capital gains tax for the purpose of assessment and payment of that tax.
(3)A person who has been charged under this section in respect of any non-resident person may retain, out of money coming into his hands on behalf of any such person, so much thereof from time to time as is sufficient to pay the tax charged, and shall be indemnified for all such payments made in pursuance of the enactments relating to capital gains tax.
Marginal Citations
M11952 s.374; 1968 Sch.XII 13.
(1)The provisions of this Part of this Act relating to income tax, so far as they are applicable to tax chargeable on a company, shall apply with any necessary adaptations in relation to corporation tax chargeable on companies not resident in the United Kingdom.
[(2)Subsection (2) of section 83 above shall apply—
(a)to corporation tax to which a person is chargeable in respect of a non-resident company and which has become due and payable without the making of an assessment; and
(b)to interest to which he is chargeable on such tax under section 87A below,
as it applies (by virtue of subsection (1) above) to corporation tax which has been assessed on him in respect of such a company F9.]
Textual Amendments
F9Finance (No. 2) Act 1987 s. 95and Sch. 6 para. 7for tax in respect of accounting periods ending after a day to be apointed (not earlier than 31 March 1992), and interest on such tax.
Textual Amendments
F10S. 85A added by Development Land Tax Act 1976 (c. 24) Sch.8 para.20. Development Land Tax Act 1976 repealed by Finance Act 1985 (c. 54), s.98(6), Sch.27 Part X.