Section 839 Annual payments payable out of relevant foreign income
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(1) In calculating the amount of relevant foreign income to be charged to income tax for a tax year, a deduction is to be allowed for an annual payment other than interest if it meets conditions [A, B1 or B2 and C]1.
Amendments
1 Substituted by Corporation Tax Act 2009 section 1322 and Schedule 1 para 637(2) for 2009-10 and later tax years (for income tax and capital gains tax purposes), and for accounting periods ending on or after 1 April 2009 (for corporation tax purposes).
(2) Condition A is that the payment is payable out of the relevant foreign income.
(3) Condition [B1]1 is that, had the payment arisen in the United Kingdom, it would have been chargeable to income tax under one of the following provisions ...2—
Chapter 10 of Part 4 (distributions from unauthorised unit trusts),
section 579 (charge to tax on royalties and other income from intellectual property),
Chapter 4 of Part 5 (certain telecommunication rights: non-trading income), or
Chapter 7 of Part 5 (annual payments not otherwise charged).
Amendments
1 Substituted by Corporation Tax Act 2009 section 1322 and Schedule 673(3) for 2009-10 and later tax years (for income tax and capital gains tax purposes), and for accounting periods ending on or after 1 April 2009 (for corporation tax purposes).
2 Omitted by Corporation Tax Act 2009 section 1326 and Schedule 3 Part 1 for 2009-10 and later tax years (for income tax and capital gains tax purposes), and for accounting periods ending on or after 1 April 2009 (for corporation tax purposes).
(3A) Condition B2 is that, had the payment arisen in the United Kingdom it would have been—
(a) required to be brought into account under Part 5 of CTA 2009 (loan relationships) as a non-trading credit, or
(b) chargeable to corporation tax under Chapter 5 of Part 10 of that Act (distributions from unauthorised unit trusts) or Chapter 7 of that Part (annual payments not other wise charged).
Amendments
Subs (3A) inserted by Corporation Tax Act 2009 section 1322 and Schedule 1 para 637(3) for 2009-10 and later tax years (for income tax and capital gains tax purposes), and for accounting periods ending on or after 1 April 2009 (for corporation tax purposes).
(4) Condition C is that the payment is made to a non-UK resident.
(5) Subsection (1) does not apply if—
(a) the relevant foreign income is received in the United Kingdom, or
(b) it is charged for the tax year in accordance with section 832 (relevant foreign income charged on remittance basis).
(6) ...
Amendments
Subs (6) omitted by Finance Act 2008 section 25 and Schedule 7 para 67 for 2008-09 and later tax years.
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