Firms with a foreign elementU.K.
857Partners to whom the remittance basis [F1applies] U.K.
(1)This section applies if—
(a)a firm carries on a trade wholly or partly outside the United Kingdom,
(b)the control and management of the trade is outside the United Kingdom, and
[F2(c)section 809B, 809D or 809E of ITA 2007 (remittance basis) applies to a partner for a tax year.]
(2)The partner's share of the profits of the trade arising in the United Kingdom is determined in accordance with sections 849 to 856.
(3)The partner's share of the profits of the trade arising outside the United Kingdom is treated as relevant foreign income F3....
Textual Amendments
F1Word in s. 857 heading substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 70(4)
F2S. 857(1)(c) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 70(2)
F3Words in s. 857(3) omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 70(3)
858Resident partners and double taxation agreementsU.K.
(1)This section applies if—
(a)a UK resident (“the partner”) is a member of a firm which—
(i)resides outside the United Kingdom, or
(ii)carries on a trade the control and management of which is outside the United Kingdom, and
(b)by virtue of any arrangements having effect under [F4section 2(1) of TIOPA 2010] (“the arrangements”) any of the income of the firm is relieved from income tax in the United Kingdom.
(2)The partner is liable to income tax on the partner's share of the income of the firm despite the arrangements.
(3)If the partner's share of the income of the firm consists of or includes a share in a qualifying distribution—
(a)made by a UK resident company, and
(b)chargeable to tax under Chapter 3 of Part 4,
the partner (and not the firm) is, despite the arrangements, entitled to the share of the tax credit which corresponds to the partner's share of the distribution.
[F5(4)For the purposes of this section the members of a firm include any person entitled to a share of income of the firm.]
Textual Amendments
F4Words in s. 858(1)(b) substituted (1.4.2010) (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 70 (with Sch. 9 paras. 1-9, 22)
F5S. 858(4) inserted (retrospectively) by Finance Act 2008 (c. 9), s. 58(3)(4)