Section 181: Assumptions to be applied if non-UK resident company involved
725.This section sets out how to calculate the “alternative proportion” for section 180. It is based on paragraph 5F of Schedule 18 to ICTA.
726.All the calculations under section 180 are done by reference to amounts that are “referable to company B’s UK trade” (defined in section 182).
727.Assumptions 2 and 3 do not include £100 as an alternative to the company’s United Kingdom profits or assets (see paragraph 5F(7)(b) of Schedule 18 to ICTA, which applies if the profits are between £1 and £99). This is because the alternative has little or no practical effect. See Change 26 in Annex 1. In a case where there are no profits, section 165(2) substitutes the amount of £100.
728.Assumption 4 refers (three times) to beneficial entitlement but paragraph 5F(7)(c) and (8) of Schedule 18 to ICTA refers only to entitlement. This is not a change in the law because the option arrangements are relevant only if they are used for a “determination” to be made under paragraph 5F(4) or (5) of the Schedule. The determination is made in accordance with paragraph 2(1) or 3(1) of the Schedule. Those sub-paragraphs make clear that the Schedule is concerned only with beneficial entitlements.
