Part 2Income tax, corporation tax and capital gains tax_general
Double taxation arrangements
57Double taxation relief
1
Section 798 of ICTA (limits on foreign tax credit: trade income) is amended as follows.
2
After subsection (1) insert—
1A
The references in section 796 and this section to income in respect of which a credit for foreign tax is to be allowed are to be treated as referring only to income arising out of the transaction, arrangement or asset in connection with which the credit for foreign tax arises.
3
In subsection (3), after “income” insert “in respect of which the credit is to be allowed”.
4
The amendments made by this section have effect in relation to a credit for foreign tax which relates to—
a
a payment of foreign tax on or after 6 April 2008, or
b
income received on or after that date in respect of which foreign tax has been deducted at source.
58UK residents and foreign partnerships
1
In section 115 of ICTA (partnerships involving companies: supplementary), after subsection (5B) insert—
5C
For the purposes of subsections (5) to (5B) the members of a partnership include any company which is entitled to a share of income or capital gains of the partnership.
2
In section 59 of TCGA 1992 (partnerships), insert at the end—
4
For the purposes of subsections (2) and (3) the members of a partnership include any person entitled to a share of capital gains of the partnership.
3
In section 858 of ITTOIA 2005 (resident partners and double taxation agreements), insert at the end—
4
For the purposes of this section the members of a firm include any person entitled to a share of income of the firm.
4
The amendments made by subsections (1) to (3) are treated as always having had effect.
5
For the purposes of the predecessor provisions, the members of a partnership are to be treated as having included, at all times to which those provisions applied, a person entitled to a share of income or capital gains of the partnership.
6
“The predecessor provisions” means—
a
section 153(4) and (5) of the Income and Corporation Taxes Act 1970 (c. 10) (as it had effect under section 62(2) of F(No.2)A 1987), and
b
sections 112(4) to (6) and 115(5) of ICTA.
59UK residents and foreign enterprises
1
In ICTA, after section 815A insert—
815AZAUK residents and foreign enterprises
1
Where arrangements having effect under section 788 make the provision mentioned in subsection (2) (however expressed), that provision does not prevent income of a person resident in the United Kingdom being chargeable to income tax or corporation tax.
2
The provision is that the profits of an enterprise which is resident outside the United Kingdom, or carries on a trade, profession or business the control or management of which is situated outside the United Kingdom, are not to be subject to United Kingdom tax except in so far as they are attributable to a permanent establishment of the enterprise in the United Kingdom.
3
A person is resident in the United Kingdom for the purposes of this section if the person is so resident for the purposes of the arrangements having effect under section 788.
4
This section does not apply in relation to—
a
income of a company resident in the United Kingdom to which section 115(5A) applies, or
b
income of a person resident in the United Kingdom to which section 858 of ITTOIA 2005 applies.
2
The amendment made by subsection (1) has effect in relation to income arising on or after 12 March 2008.