Taxation (International and Other Provisions) Act 2010 section 76

Former and subsequent establishments regarded as distinct establishments

Section 76 requires that where a company closes an overseas permanent establishment in a territory and later opens a new one in the same territory, the two are treated as separate establishments for double taxation relief purposes.

• If a company ceases to have a permanent establishment in an overseas territory and later establishes a new one in the same territory, the old and new establishments are treated as distinct for most purposes of sections 72 to 78.
• This means that unrelieved foreign tax from the old establishment cannot generally be carried forward and set against tax arising from the new establishment as if they were the same operation.
• There are exceptions to this separation rule: the provisions in sections 73(2), 75, and 77 still apply across both the old and new establishments without treating them as distinct.
• The effect is to prevent companies from automatically inheriting the tax credit history of a former establishment when they re-enter the same overseas territory.