Finance Act 2009

Exemption from tax for certain financing income received from certain EEA companies

40 (1) A financing income amount of a company that is a member of the worldwide group (“the recipient”) is not to be brought into account for the purposes of corporation tax if—

(a) it arises as a result of a payment by another company that is a member of the worldwide group (“the payer”),

(b) the payment is received during a period of account of the worldwide group to which this Schedule applies, and

(c) conditions A, B and C are met.

(2) Condition A is that, at the time the payment is received, the payer is a relevant associate of the recipient (see paragraph 41).

(3) Condition B is that, at the time the payment is received—

(a) the payer is tax-resident in an EEA territory (see paragraph 42), and

(b) the payer is liable to a tax of that territory that is chargeable by reference to profits, income or gains arising to the payer.

(4) Condition C is that—

(a) qualifying EEA tax relief for the payment is not available to the payer in the period in which the payment is made (“the current period”) or any previous period (see paragraph 43), and

(b) qualifying EEA tax relief for the payment is not available to the payer in any period after the current period (see paragraph 44).

(5) For the meaning of “financing income amount”, see paragraph 46.