Income Tax (Trading and Other Income) Act 2005

[F1 608K Exemption where business undertaken within territory of residence U.K.

(1) Section 608A does not apply in relation to a person (“the relevant person”) for a tax year if—

(a) the relevant person is resident in a territory throughout the tax year,

(b) all (or substantially all) relevant activity in relation to relevant intangible property is, and has at all times been, undertaken in that territory,

(c) there is no relevant connection between relevant intangible property and a related person, and

(d) the person makes a claim under this section.

[F2 (1A) For the purposes of this section, section 608D (meaning of residence) applies as if subsections (2)(b), (4) and (5) were omitted.]

(2) For the purposes of this section intangible property is “relevant” if any UK-derived amount arising to the person in the tax year relates to it.

(3) In subsection (1)(b) “relevant activity”, in relation to relevant intangible property, means anything done (by any person)—

(a) for the purpose of creating, developing or maintaining any of the relevant intangible property; or

(b) for the purpose of generating, for the relevant person, amounts (whether of a revenue or capital nature) that relate, wholly or in part and directly or indirectly, to the enjoyment or exercise of rights that constitute any of the relevant intangible property.

(4) For the purposes of subsection (1)(c) there is a “relevant connection” between relevant intangible property and a related person if any relevant intangible property—

(a) has been transferred (directly or indirectly) from a person related to the relevant person,

(b) derives (directly or indirectly) from anything so transferred, or

(c) derives (directly or indirectly) from intangible property held by a person related to the relevant person.

(5) See section 608T for the meaning of two persons being “related”.]

Textual Amendments

F1 Pt. 5 Ch. 2A inserted (with effect in accordance with Sch. 3 para. 7 of the amending Act) by Finance Act 2019 (c. 1), Sch. 3 para. 4 (with Sch. 3 para. 8)

F2 S. 608K(1A) inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Income Tax (Trading and Other Income) Act 2005 (Amendments to Chapter 2A of Part 5) Regulations 2019 (S.I. 2019/1452), regs. 1(1), 8