Part 8Foreign income: special rules
Chapter 3Relevant foreign income charged on arising basis: deductions and reliefs
839Annual payments payable out of relevant foreign income
(1)
In calculating the amount of relevant foreign income to be charged to income tax for a tax year, a deduction is to be allowed for an annual payment other than interest if it meets conditions F1A, B1 or B2 and C .
(2)
Condition A is that the payment is payable out of the relevant foreign income.
(3)
Condition F2B1 is that, had the payment arisen in the United Kingdom, it would have been chargeable to income tax under one of the following provisions F3...—
Chapter 10 of Part 4 (distributions from unauthorised unit trusts),
section 579 (charge to tax on royalties and other income from intellectual property),
Chapter 4 of Part 5 (certain telecommunication rights: non-trading income), or
Chapter 7 of Part 5 (annual payments not otherwise charged).
F4(3A)
Condition B2 is that, had the payment arisen in the United Kingdom it would have been—
(a)
required to be brought into account under Part 5 of CTA 2009 (loan relationships) as a non-trading credit, or
(b)
chargeable to corporation tax under Chapter 5 of Part 10 of that Act (distributions from unauthorised unit trusts) or Chapter 7 of that Part (annual payments not otherwise charged).
(4)
Condition C is that the payment is made to a non-UK resident.
(5)
Subsection (1) does not apply if—
(a)
the relevant foreign income is received in the United Kingdom, or
(b)
it is charged for the tax year in accordance with section 832 (relevant foreign income charged on remittance basis).
F5(6)
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