Corporation Tax Act 2009 section 5

Territorial scope of charge

Section 5 establishes the geographical boundaries of the corporation tax charge, distinguishing between UK resident and non-UK resident companies and setting out the circumstances in which each is subject to tax.

• UK resident companies are charged corporation tax on all their profits worldwide, though an exemption may apply for profits of foreign permanent establishments
• Non-UK resident companies are only within the charge to corporation tax if they deal in or develop UK land, trade in the UK through a permanent establishment, carry on a UK property business, or have other UK property income
• For non-UK resident companies, the charge is limited to profits attributable to the specific UK activity, including related loan relationship and derivative contract profits where relevant
• The territorial scope for corporation tax on chargeable gains is dealt with separately under the Taxation of Chargeable Gains Act 1992