Income Tax (Trading and Other Income) Act 2005 section 760

The person beneficially entitled to the payment

Section 760 identifies who is considered the beneficial owner of an interest or royalty payment for the purposes of the EU company exemption, particularly where permanent establishments are involved.

• The exemption under section 758 requires the person beneficially entitled to the payment to be an EU company, but not one acting through a permanent establishment in the UK or a non-member state.
• The section clarifies how beneficial entitlement is determined when an EU company operates through permanent establishments in different locations.
• If a payment is received by or connected with a permanent establishment in the UK or a non-member state, the beneficial ownership condition is not met and the exemption will not apply.
• The provision ensures the exemption is correctly targeted at EU companies receiving income in their capacity as EU-resident entities, rather than through establishments outside the EU framework.