Capital Allowances Act 2001 section 270CC

Foreign permanent establishments

Section 270CC deals with how structures and buildings allowances interact with companies that have elected to exempt the profits or losses of their foreign permanent establishments from UK corporation tax.

• Where a company has elected under section 18A of CTA 2009 to exempt its foreign permanent establishment profits, any business conducted through those overseas establishments is treated as a separate activity from the company's other activities.
• All profits and gains from this separate foreign activity are regarded as not chargeable to UK tax, or would not be chargeable if any arose.
• This treatment applies specifically for the purposes of the structures and buildings allowances regime under this Part of the Act.
• The practical effect is that expenditure attributable to structures or buildings used by an exempt foreign permanent establishment will not qualify for structures and buildings allowances, because the related income is outside the charge to UK tax.