Search Legislation

Income Tax Act 2007

 Help about what version

What Version

 Help about advanced features

Advanced Features

Changes to legislation:

There are currently no known outstanding effects for the Income Tax Act 2007, Chapter 11. Help about Changes to Legislation

Close

Changes to Legislation

Revised legislation carried on this site may not be fully up to date. At the current time any known changes or effects made by subsequent legislation have been applied to the text of the legislation you are viewing by the editorial team. Please see ‘Frequently Asked Questions’ for details regarding the timescales for which new effects are identified and recorded on this site.

Chapter 11U.K.Payments between companies etc: exception from duties to deduct

IntroductionU.K.

929Overview of ChapterU.K.

(1)This Chapter makes provision allowing some payments made by companies, local authorities and qualifying partnerships to be paid gross where they would otherwise be subject to specified duties to deduct sums representing income tax under this Part.

(2)Section 930 disapplies specified duties to deduct where a payment is made by a company, local authority or qualifying partnership which reasonably believes that the payment is an excepted payment.

(3)Section 931 confers power on an officer of Revenue and Customs to disapply section 930 by direction.

(4)Section 932 defines “qualifying partnership”.

(5)Sections 933 to 937 make provision as to when a payment is an excepted payment.

(6)Section 938 deals with what happens when a company, local authority or qualifying partnership makes a payment without deducting a sum representing income tax under a reasonable but incorrect belief that the payment is an excepted payment.

Exception from duties to deduct for excepted paymentsU.K.

930Exception from duties to deduct sums representing income taxU.K.

(1)The duties to deduct sums representing income tax mentioned in subsection (2) do not apply to a payment if—

(a)it is made by a company, local authority or qualifying partnership, and

(b)at the time the payment is made, the company, authority or partnership reasonably believes that it is an excepted payment.

(2)The duties to deduct are those under—

(a)section 874(2) (certain payments of yearly interest),

(b)section 889(4) (payments in respect of building society securities),

(c)section 901(4) (annual payments made by persons other than individuals),

(d)section 903(7) (patent royalties),

(e)section 906(5) (certain royalty payments etc where the owner lives abroad),

(f)section 910(2) (proceeds of a sale of patent rights paid to non-UK residents),

(g)section 919(2) (manufactured interest on UK securities: payments by UK residents etc), and

(h)section 928(2) (chargeable payments connected with exempt distributions).

(3)Subsection (1) has effect subject to any directions under section 931.

(4)Subsection (1) does not apply to a payment made by a company, or qualifying partnership, acting as trustee or agent for another person.

931Power to make directions disapplying section 930U.K.

(1)An officer of Revenue and Customs may give a direction to a company, local authority or qualifying partnership directing that section 930 is not to apply in relation to any payment that—

(a)is made by the company, authority or partnership after the giving of the direction, and

(b)is specified in the direction or is of a description so specified.

(2)A direction under this section may be given only if the officer has reasonable grounds for believing, as respects each payment to which the direction relates, that the payment will not be an excepted payment at the time it is made.

(3)A direction under this section may be varied or revoked by a later direction.

(4)A variation or revocation of a direction under this section has effect only in relation to payments made after the date of the variation or revocation.

932Meaning of “qualifying partnership”U.K.

For the purposes of this Chapter a partnership is a “qualifying partnership” if any partner in the partnership is a company or a local authority.

Excepted paymentsU.K.

933UK resident companiesU.K.

A payment is an excepted payment if the person beneficially entitled to the income in respect of which the payment is made is a UK resident company.

Modifications etc. (not altering text)

934Non-UK resident companiesU.K.

(1)A payment is an excepted payment if each of the following conditions is met in relation to the payment.

(2)The person beneficially entitled to the income in respect of which the payment is made must be a non-UK resident company.

(3)The non-UK resident company must carry on a trade in the United Kingdom through a permanent establishment.

(4)The payment must be one that is required to be brought into account in calculating the chargeable profits (within the meaning given by [F1section 19 of CTA 2009]) of the non-UK resident company.

Textual Amendments

F1Words in s. 934(4) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 710 (with Sch. 2 Pts. 1, 2)

935PEP and ISA managersU.K.

(1)A payment is an excepted payment if each of the following conditions is met in relation to the payment.

(2)The person to whom the payment is made must be, or must be the nominee of, the plan manager of a plan of a kind to which regulations under Chapter 3 of Part 6 of ITTOIA 2005 (income from individual investment plans) apply.

(3)The plan manager must receive the payment in respect of investments under the plan.

Modifications etc. (not altering text)

C2S. 935 applied (with modifications) by S.I. 2004/1450, reg. 24(c) (as amended (6.4.2010) by The Child Trust Funds (Amendment) Regulations 2010 (S.I. 2010/582), regs. 1, 12(d))

936Recipients who are to be paid grossU.K.

(1)A payment is an excepted payment if it is made to, or to the nominee of, a recipient who is specified in subsection (2) as a recipient who is to be paid gross.

(2)The following recipients are to be paid gross—

(a)a local authority,

(b)a health service body within the meaning of [F2section 986 of CTA 2010],

(c)a public office or department of the Crown other than one mentioned in section 978(2),

(d)a charity,

(e)a body for the time being mentioned in [F3section 468 of CTA 2010] (bodies that are allowed the same exemption from tax as charitable companies the whole income of which is applied to charitable purposes),

[F4(f)a body which is an association for the purposes of section 469(1)(a) of CTA 2010 (scientific research associations) and complies with the conditions in subsections (2) and (3) of that section,]

(g)the scheme administrator of a registered pension scheme,

(h)the sub-scheme administrator of a sub-scheme which forms part of a split scheme pursuant to the Registered Pensions (Splitting of Schemes) Regulations 2006 (S.I. 2006/569),

(i)the trustees of a scheme entitled to exemption under section 613(4) of ICTA (Parliamentary pension funds), and

(j)the persons entitled to receive the income of a fund entitled to exemption under section 614(3) of ICTA (certain colonial, etc pension funds).

(3)The Treasury may by order amend this section so as to add to, restrict or otherwise alter the persons or bodies who are to be paid gross.

Textual Amendments

F2Words in s. 936(2)(b) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 557(a) (with Sch. 2)

F3Words in s. 936(2)(e) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 557(b) (with Sch. 2)

F4S. 936(2)(f) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 557(c) (with Sch. 2)

937PartnershipsU.K.

(1)A payment is an excepted payment if each of the following conditions are met.

(2)A partnership must be beneficially entitled to the income in respect of which the payment is made.

(3)Each partner in the partnership must be—

(a)a person or body mentioned in section 936, or

(b)a person or body to whom one of subsections (4) to (6) applies.

(4)This subsection applies to a UK resident company.

(5)This subsection applies to a company that—

(a)is non-UK resident,

(b)carries on a trade in the United Kingdom through a permanent establishment, and

(c)is required to bring into account, in calculating its chargeable profits (within the meaning of [F5section 19 of CTA 2009]), the whole of any share of the payment that is attributable to it because of [F6Part 17 of that Act].

(6)This subsection applies to the European Investment Fund.

(7)The Treasury may by order amend this section to add to, restrict or otherwise alter the persons or bodies falling within subsection (3)(b).

Textual Amendments

F5Words in s. 937(5)(c) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 711(a) (with Sch. 2 Pts. 1, 2)

F6Words in s. 937(5)(c) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 711(b) (with Sch. 2 Pts. 1, 2)

Incorrect belief that payment is an excepted paymentU.K.

938Consequences of reasonable but incorrect beliefU.K.

(1)This section applies if—

(a)a payment is made by a company, local authority or qualifying partnership without a sum representing income tax on the payment being deducted from it,

(b)at the time the payment is made, the company, authority or partnership reasonably believes that it is an excepted payment,

(c)one of the duties to deduct sums representing income tax mentioned in section 930(2) would apply to the payment if the company did not so believe, and

(d)the payment is not an excepted payment at the time it is made.

(2)This Part has effect in relation to the payment as if section 930(1) had never disapplied the duties to deduct mentioned in section 930(2).

Back to top

Options/Help

Print Options

You have chosen to open The Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act as a PDF

The Whole Act you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open The Whole Act without Schedules

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act without Schedules as a PDF

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open the Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open the Whole Act without Schedules

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open Schedules only

The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Close

See additional information alongside the content

Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.

Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

Explanatory Notes

Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

Timeline of Changes

This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.

Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources