Finance Act 2000

Relief for persons resident outside the UK who have branches or agencies in the UK

4 (1) Amend section 790 of the Taxes Act 1988 (unilateral relief) in accordance with sub-paragraphs (2) and (3).

(2) In subsection (6) (dividend paid to company resident in United Kingdom) for “company resident in the United Kingdom” substitute “company falling within subsection (6A) below”.

(3) After subsection (6) insert—

“(6A) A company falls within this subsection if—

(a) it is resident in the United Kingdom; or

(b) it is resident outside the United Kingdom but the dividend mentioned in subsection (6) above forms part of the profits of a branch or agency of the company’s in the United Kingdom.”

(4) Amend section 794 of the Taxes Act 1988 (requirement as to residence) in accordance with sub-paragraphs (5) and (6).

(5) In subsection (2) (cases where credit may be allowed by way of unilateral relief) after paragraph (b) insert—

“(bb) for tax paid under the law of any territory outside the United Kingdom in respect of the income or chargeable gains of a branch or agency in the United Kingdom of a person who is not resident in the United Kingdom, where the following conditions are fulfilled, namely—

(i) that the territory under whose law the tax was paid is not one in which the person is liable to tax by reason of domicile, residence or place of management; and

(ii) that the amount of relief claimed does not exceed (or is by the claim expressly limited to) that which would have been available if the branch or agency had been a person resident in the United Kingdom and the income or gains in question had been income or gains of that person.”

(6) Omit subsection (2)(c) (which is superseded by the amendment made by sub-paragraph (5)).

(7) Amend section 801 of the Taxes Act 1988 (dividends paid between related companies: relief for UK and third country taxes) in accordance with sub-paragraphs (8) and (9).

(8) In subsection (1) (dividend paid to company resident in the United Kingdom)—

(a) for “company resident in the United Kingdom (“the United Kingdom company”)” substitute “company falling within subsection (1A) below (“the relevant company”)”; and

(b) for “to the United Kingdom company” substitute “to the relevant company”.

(9) After subsection (1) insert—

“(1A) A company falls within this subsection if—

(a) it is resident in the United Kingdom; or

(b) it is resident outside the United Kingdom but the dividend mentioned in subsection (1) above forms part of the profits of a branch or agency of the company’s in the United Kingdom.”

(10) Amend section 801A of the Taxes Act 1988 (restriction of relief for underlying tax) in accordance with sub-paragraphs (11) and (12).

(11) In subsection (1)(a) (company resident in United Kingdom making claim for allowance by way of credit) for “a company resident in the United Kingdom (“the United Kingdom company”)” substitute “a company (“the claimant company”)”.

(12) In subsections (2), (7) and (11), for “the United Kingdom company” substitute “the claimant company”.

(13) In Schedule 19AC to the Taxes Act 1988 (modification of Act in relation to overseas life insurance companies) amend paragraph 13 (which notionally inserts certain provisions into section 794) as follows—

(a) omit sub-paragraph (1) (which notionally inserts subsection (2)(d));

(b) in sub-paragraph (2) (which notionally inserts subsections (3) and (4)) in the words preceding the notionally inserted subsections, for “subsections shall be treated as inserted after that subsection” substitute “subsection shall be treated as inserted after subsection (2) of section 794”;

(c) omit the subsection (3) notionally inserted by sub-paragraph (2);

(d) in the subsection (4) notionally inserted by sub-paragraph (2), for “subsection (2)(d)” substitute “subsection (2)(bb)”.

(14) The amendments made by this paragraph have effect in relation to accounting periods ending on or after 21st March 2000.