Corporation Tax Act 2010 section 779

Tax charged on income transferred

Section 779 imposes a corporation tax charge where a company transfers income arising from property under a loan or credit transaction, without transferring the property itself, and is not already taxed on that income under the finance arrangements rules in Chapter 2.

• Where a company transfers income from property under a loan or credit transaction and is not already charged to corporation tax on it under the finance arrangements rules, the company is charged to corporation tax on an amount equal to the income transferred.
• Transferring income includes surrendering, waiving, or forgoing it — any mechanism by which the company gives up income it would otherwise have received.
• Where a buyer obtains credit for the purchase price of property and the buyer's rights to income from that property are suspended or restricted while the debt remains outstanding, the buyer is treated as having surrendered income equal to the amount effectively forgone by obtaining the credit.
• Any income amount that would normally be paid after deduction of income tax must be measured at its gross (pre-deduction) figure for the purposes of this charge.