What is the purpose of section 979 of the Corporation Tax Act 2009?

Section 979 acts as a safety net within the corporation tax system. It ensures that any income received by a company which has not been charged to corporation tax under a more specific provision of the Corporation Tax Acts is still brought within the scope of corporation tax, preventing income from escaping the tax charge.

What types of income are excluded from the residual charge under section 979 CTA 2009?

Three categories are excluded from the residual charge under section 979. First, annual payments are carved out as they have their own rules. Second, income specifically exempt from corporation tax under Part 19 of CTA 2009 or other legislation remains exempt. Third, deemed income—amounts another provision treats as income—is also excluded.

Does section 979 override a specific corporation tax exemption?

No. Section 979 does not override any specific exemption from corporation tax. If income benefits from an exemption under the Corporation Tax Act 2009 or any other legislation, that exemption is preserved and the income is not inadvertently brought back into charge by this residual provision.

How does section 979 apply in practice to income received by a UK company?

If a UK company receives income that does not fall within any specific corporation tax charging provision—such as trading income, property income, or loan relationship income—section 979 operates as the residual charge and brings that payment within the scope of corporation tax on income automatically.

Corporation Tax Act 2009 section 979

Charge to tax on income not otherwise charged

Section 979 applies the charge to corporation tax on income that is not already charged to corporation tax under any other provision of the Corporation Tax Acts.

Any income received by a company that is not already subject to corporation tax under another provision is caught by this section as a residual charging provision
Annual payments are excluded from this residual charge, as they are dealt with separately elsewhere
Income that benefits from a specific exemption (whether under the Corporation Tax Act 2009 or other legislation) is not brought into charge by this section
Deemed income — amounts that another provision of the Corporation Tax Acts treats as income — is also excluded from this residual charge

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