Income and Corporation Taxes Act 1988

[F1 806M Provisions supplemental to section 806L. U.K.

(1) This section has effect for the purposes of section 806L and shall be construed as one with that section.

(2) If, in any accounting period, a company ceases to have a particular overseas [F2 permanent establishment], the amount of any unrelieved foreign tax which arises in that accounting period in respect of the company’s income from that overseas [F2 permanent establishment] shall, to the extent that it is not treated as mentioned in section 806L(2)(b), be reduced to nil (so that no amount arises which falls to be treated as mentioned in section 806L(2)(a)).

(3) If a company—

(a) at any time ceases to have a particular overseas [F2 permanent establishment] in a particular territory (“the old [F2 permanent establishment]”), but

(b) subsequently again has an overseas [F2 permanent establishment] in that territory (“the new [F2 permanent establishment]”),

the old [F2 permanent establishment] and the new [F2 permanent establishment] shall be regarded as different overseas [F2 permanent establishments].

(4) If, under the law of a territory outside the United Kingdom, tax is charged in the case of a company resident in the United Kingdom in respect of the profits of two or more of its overseas [F2 permanent establishments] in that territory, taken together, then, for the purposes of—

(a) section 806L, and

(b) subsection (3) above,

those overseas [F2 permanent establishments] shall be treated as if they together constituted a single overseas [F2 permanent establishment] of the company.

(5) Unrelieved foreign tax arising in respect of qualifying income from a particular overseas [F2 permanent establishment] in any accounting period shall only be treated as mentioned in subsection (2) of section 806L on a claim.

(6) Any such claim must specify the amount (if any) of the unrelieved foreign tax—

(a) which is to be treated as mentioned in paragraph (a) of that subsection; and

(b) which is to be treated as mentioned in paragraph (b) of that subsection.

(7) A claim under subsection (5) above may only be made before the expiration of the period of—

(a) six years after the end of the accounting period mentioned in that subsection, or

(b) if later, one year after the end of the accounting period in which the foreign tax in question is paid.]

Textual Amendments

F1 Ss. 806L, 806M and cross-heading inserted (with effect in accordance with Sch. 30 para. 23(2)(3) of the amending Act) by Finance Act 2000 (c. 17), Sch. 30 para. 23(1)

F2 Words in s. 806M(2)-(5) substituted (with effect in accordance with s. 153(4) of the amending Act) by Finance Act 2003 (c. 14), s. 153(1)(a)