Income Tax (Trading and Other Income) Act 2005 section 608JA

Exemption where company resident in specified territory

Section 608JA provides an exemption from the offshore receipts rules in Chapter 2A where a company is resident in a territory specified by HMRC and meets certain conditions regarding the taxation of its UK-derived income in that territory.

• A company resident throughout the tax year in a territory specified by the Commissioners may be exempt from the charge under section 608A on its UK-derived amounts.
• The exemption requires that the UK-derived amounts are subject to tax under the laws of that territory, and where tax applies only on remittance, the amounts must actually have been remitted or received there during the tax year.
• The tax paid in the specified territory on the UK-derived amounts must not have been reduced by designer rate tax provisions, and the company must not be party to any arrangement whose main purpose, or one of whose main purposes, is to obtain a tax advantage for itself or any other person.
• The Commissioners may make regulations specifying which territories qualify, and these regulations may have retrospective effect, except where the effect would be to remove a territory from the specified list.

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