Corporation Tax Act 2010

779 Tax charged on income transferred U.K.

(1) This section applies if—

(a) under a loan or credit transaction a company transfers income arising from property,

(b) the company is not, as a result of Chapter 2 (finance arrangements), chargeable to corporation tax on the income transferred, and

(c) the company is within the charge to corporation tax.

(2) In such a case, the company which transfers the income is charged to corporation tax, under the charge to corporation tax on income, on an amount equal to the income transferred.

(3) This section does not prejudice the liability of any other person to tax.

(4) For the purposes of this section a company transfers income if it surrenders, waives or forgoes it.

(5) Subsection (6) applies for the purposes of this section if—

(a) credit is given for the purchase price of property, and

(b) the rights attaching to the property are such that the buyer's rights to income from the property are suspended or restricted during the life of the debt.

(6) The buyer must be treated as surrendering income of an amount equal to the income the buyer in effect forgoes by obtaining the credit.

(7) For the purposes of this section an amount of income payable subject to deduction of income tax must be taken as the amount before deduction of tax.