Income Tax Act 2007 section 899

Meaning of "qualifying annual payment"

Section 899 defines what counts as a "qualifying annual payment" for the purposes of the deduction of income tax at source rules, by setting out the conditions a payment must meet and the exclusions that apply.

• A qualifying annual payment must arise in the United Kingdom and fall within specified income tax or corporation tax charges depending on whether the recipient is an individual or a company.
• For individual recipients, the payment must be charged to income tax under specific provisions covering purchased life annuities, intellectual property royalties, telecommunication rights, annual payments not otherwise charged, or certain employment-related annuities.
• For company recipients, the payment must either meet the same income tax criteria as for individuals, or be a non-trading credit under the loan relationships rules, or be from a UK source chargeable to corporation tax under the annual payments or unauthorised unit trust rules.
• Certain payments are excluded, including interest, qualifying charitable payments, gift aid donations, discretionary trust payments where income tax is treated as already paid, and annual payments made for dividends or non-taxable consideration.