(1)M1A company not resident in the United Kingdom shall not be within the charge to corporation tax unless it carries on a trade in the United Kingdom through a branch or agency but, if it does so, it shall, subject to any exceptions provided for by theCorporation Tax Acts, be chargeable to corporation tax on all its chargeable profits wherever arising.
(2)For purposes of corporation tax the chargeable profits of a company not resident in the United Kingdom but carrying on a trade there through a branch or agency shall be—
(a)any trading income arising directly or indirectly through or from the branch or agency, and any income from property or rights used by, or held by or for, the branch or agency (but so that this paragraph shall not include distributions received from companies resident in the United Kingdom); and
(b)such chargeable gains accruing on the disposal of assets situated in the United Kingdom as are by section 12 of the 1979 Act made chargeable to capital gains tax in the case of an individual not resident or ordinarily resident in the United Kingdom.
(3)Subject to section 447, where a company not resident in the United Kingdom receives any payment on which it bears income tax by deduction, and the payment forms part of, or is to be taken into account in computing, the company’s income chargeable to corporation tax, the income tax thereon shall be set off against any corporation tax assessable on that income by an assessment made for the accounting period in which the payment falls to be taken into account for corporation tax; and accordingly in respect of that payment the company shall not be entitled to a repayment of income tax before the assessment for that accounting period is finally determined and it appears that a repayment is due.
(4)M2Subsection (3) above does not apply to a payment of relevant loan interest to which section 369 applies.
Modifications etc. (not altering text)
C1 See—1970 s.273—transfer of U.K. branch or agency.1989 s.127(6)—non-residents: deemed disposals; s.129(6)—non-residents roll-over relief; s.131(6)—exploration or exploitation assets: deemed disposals; and s.134(1)(b)—non-payment of tax by non-resident companies.1990 s.32—employee share ownership trusts: roll over relief.
C2 See—1970(M) s.94(2)—set off to be disregarded in computing penalty for failure to make a return.1990 ss.98and 132and Sch.19 Part Vfor changes in relation to income tax falling to be set off against corporation tax for accounting periods ending after the appointed day (see 1988 s.10).
Marginal Citations
M1SOURCE-1970 s.246; 1979(C) Sch. 7
M2SOURCE-1982 s. 26(7)