Income Tax (Trading and Other Income) Act 2005 section 759

The person making the payment

Section 759 identifies who is treated as the payer of interest or royalty payments for the purposes of the exemption under section 758, particularly where a company operates through permanent establishments in different territories.

• The section determines which entity is treated as the "payer" when a company has permanent establishments in more than one territory.
• The key test is where the interest or royalty payments are deductible against taxable profits.
• If the payments are deductible against the profits of a permanent establishment in the territory where it is situated, that permanent establishment is treated as the payer.
• Correctly identifying the payer is essential because the exemption under section 758 requires the payer to be located in the United Kingdom.