Taxation (International and Other Provisions) Act 2010 section 72

Application of section 73(1)

Section 72 establishes when a UK-resident company has unrelieved foreign tax on profits from an overseas permanent establishment, triggering the carry-forward and carry-back rules in the sections that follow.

• Where a UK company pays foreign tax on profits of an overseas permanent establishment, and the credit allowed against UK corporation tax is less than the credit that would be available if the normal cap were ignored, the excess (unrelieved) foreign tax can potentially be carried forward or back under the rules in section 73.
• Qualifying income from an overseas permanent establishment means the profits of that establishment which are chargeable as trading profits of a trade carried on partly, but not wholly, outside the United Kingdom.
• The section defines key terms used throughout sections 73 to 78, including "the company," "the excess," "the PE" (permanent establishment), and "period A" (the accounting period in which the excess arises).
• This section is the gateway provision for the permanent establishment unrelieved foreign tax rules — the carry-forward and carry-back mechanism in section 73 only applies once the conditions in section 72 are met.