[F1(1)A company not resident in the United Kingdom is within the charge to corporation tax if, and only if, it carries on a trade in the United Kingdom through a permanent establishment in the United Kingdom.
(2)If it does so, it is chargeable to corporation tax, subject to any exceptions provided for by the Corporation Tax Acts, on all profits, wherever arising, that are attributable to its permanent establishment in the United Kingdom.
These profits, and these only, are the company’s “chargeable profits” for the purposes of corporation tax.
(2A)The profits attributable to a permanent establishment for the purposes of corporation tax are—
(a)trading income arising directly or indirectly through or from the establishment,
(b)income from property or rights used by, or held by or for, the establishment, and
(c)chargeable gains falling within section 10B of the 1992 Act—
(i)by virtue of assets being used in or for the purposes of the trade carried on by the company through the establishment, or
(ii)by virtue of assets being used or held for the purposes of the establishment or being acquired for use by or for the purposes of the establishment.]
(3)F2. . . 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 F3. . . 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)M1Subsection (3) above does not apply to a payment of relevant loan interest to which section 369 applies.
Textual Amendments
F1S. 11(1)-(2A) substituted for s. 11(1)(2) (with effect in accordance with s. 149(6) of the amending Act) by Finance Act 2003 (c. 14), s. 149(1)
F2Words in s. 11(3) repealed (27.7.1993 with effect in accordance with s. 103 of the amending Act) by 1993 c. 34, ss. 103, 213, Sch. 23 Pt.III
F3Words in s. 11(3) repealed (with effect as mentioned in Sch. 27 Pt. 3(28) Note of the amending Act) by Finance Act 1998 (c. 36), s. 165, Sch. 27 Pt. 3(28)
Modifications etc. (not altering text)
C1 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).
C2S. 11(3) applied (with modifications) (with effect in accordance with s. 105(1) of the applying Act) by Finance Act 1996 (c. 8), s. 91(2) (with Schs. 10, 11, 15)
Marginal Citations
M1SOURCE-1982 s. 26(7)