(1)This Chapter deals with the deduction of sums representing income tax from—
(a)qualifying annual payments, and
(b)royalties or other sums paid in respect of the use of patents.
(2)See also—
(a)Chapter 11 (payments between companies etc) for an exception from the duties to deduct sums representing income tax under this Chapter,
(b)Chapter 4 of Part 8, which gives relief for certain payments from which sums representing income tax must be deducted under this Chapter, and
(c)section 615(3) of ICTA (exemption from tax in respect of certain pensions) which contains a further exception from the duties to deduct sums representing income tax under this Chapter.
(3)If a payment to which a provision of this Chapter applies is also one to which section 906 applies, it is treated as not being a payment to which a provision of this Chapter applies.
(1)In this Chapter “qualifying annual payment” means an annual payment that meets the conditions in subsections (2) to (5).
(2)The payment must arise in the United Kingdom.
(3)If the recipient is a person other than a company, the payment must be—
(a)a payment charged to income tax under—
(i)Chapter 7 of Part 4 of ITTOIA 2005 (purchased life annuity payments),
(ii)section 579 of that Act (royalties etc from intellectual property),
(iii)Chapter 4 of Part 5 of that Act (certain telecommunication rights: non-trading income), or
(iv)Chapter 7 of Part 5 of that Act (annual payments not otherwise charged), or
(b)a payment charged to income tax under Part 9 of ITEPA 2003 because section 609 or 611 of that Act applies to it (certain employment-related annuities).
(4)If the recipient is a company, the payment must be—
(a)a payment charged to income tax as mentioned in subsection (3)(a), or
(b)a payment charged to corporation tax under Case III of Schedule D.
(5)The payment must not be—
(a)interest,
(b)a qualifying donation as defined in section 339 of ICTA (donations to charity by companies),
(c)a payment which is a qualifying donation for the purposes of Chapter 2 of Part 8 (gift aid),
(d)a payment in relation to which income tax is treated as having been paid under section 494(3) (income tax treated as paid by beneficiary or settlor in relation to discretionary trust),
(e)a payment which would fall within paragraph (d) but for the fact that the trustees making the payment are non-UK resident, or
(f)an annual payment to which section 904 applies (annual payments for dividends or non-taxable consideration).