PART IX ANNUAL PAYMENTS AND INTEREST
Annual payments
348 Payments out of profits or gains brought into charge to income tax: deduction of tax.
(1)
M1Subject to any provision to the contrary in the Income Tax Acts, where any annuity or other annual payment charged with tax under Case III of Schedule D, not being interest, is payable wholly out of profits or gains brought into charge to income tax—
(a)
the whole of the profits or gains shall be assessed and charged with income tax on the person liable to the annuity or other annual payment, without distinguishing the annuity or other annual payment; and
(b)
the person liable to make the payment, whether out of the profits or gains charged with income tax or out of any annual payment liable to deduction, or from which a deduction has been made, shall be entitled on making the payment to deduct and retain out of it a sum representing the amount of income tax thereon; and
(c)
the person to whom the payment is made shall allow the deduction on receipt of the residue of the payment, and the person making the deduction shall be acquitted and discharged of so much money as is represented by the deduction, as if that sum had been actually paid; and
(d)
the deduction shall be treated as income tax paid by the person to whom the payment is made.
(2)
Subject to any provision to the contrary in the Income Tax Acts, where—
(a)
any royalty or other sum paid in respect of the user of a patent; F1. . .
(b)
F1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
is paid wholly out of profits or gains brought into charge to income tax, the person making the payment shall be entitled on making the payment to deduct and retain out of it a sum representing the amount of the income tax thereon.