|
| |
|
Payments by persons liable to pool betting duty |
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748 | Payments by persons liable to pool betting duty |
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(1) | No liability to income tax arises in respect of a payment which meets condition |
| |
A and either condition B or C. |
| |
(2) | Condition A is that the payment is made, in consequence of a reduction in pool |
| 5 |
betting duty, by a person liable to that duty. |
| |
(3) | Condition B is that the payment is in order to meet (directly or indirectly) |
| |
capital expenditure incurred in improving the safety or comfort of spectators |
| |
at a ground to be used for the playing of association football. |
| |
(4) | Condition C is that the payment is to trustees established mainly for the |
| 10 |
support of athletic sports or athletic games but with power to support the arts. |
| |
| |
| |
| |
749 | Interest paid under repayment supplements |
| 15 |
No liability to income tax arises in respect of interest paid under— |
| |
(a) | section 824 of ICTA (repayment supplements: individuals and others), |
| |
| |
(b) | section 283 of TCGA 1992 (repayment supplements). |
| |
750 | Interest from tax reserve certificates |
| 20 |
No liability to income tax arises in respect of interest from tax reserve |
| |
certificates issued by the Treasury. |
| |
751 | Interest on damages for personal injury |
| |
(1) | No liability to income tax arises in respect of interest on damages for personal |
| |
| 25 |
(a) | it is included in a sum awarded by a court, |
| |
(b) | it does not relate to the period between the making and satisfaction of |
| |
| |
(c) | in the case of an award by a court in a country outside the United |
| |
Kingdom, it is exempt from any charge to tax in that place. |
| 30 |
(2) | No liability to income tax arises in respect of interest if— |
| |
(a) | it is included in a payment in satisfaction of a cause of action (including |
| |
a payment into court), and |
| |
(b) | it would fall within subsection (1) if it were included in a sum awarded |
| |
by a court in respect of a cause of action. |
| 35 |
| |
“damages” in Scotland includes solatium, and |
| |
|
| |
|
| |
|
“personal injury” includes disease and impairment of physical or mental |
| |
| |
752 | Interest under employees’ share schemes |
| |
(1) | This section applies if— |
| |
(a) | a scheme is set up to comply with section 153(4)(b) of the Companies |
| 5 |
Act 1985 (c. 6) or Article 163(4)(b) of the Companies (Northern Ireland) |
| |
Order 1986 (S.I. 1986/1032 (N.I. 6)) (financial assistance for the |
| |
purposes of an employees’ share scheme), and |
| |
(b) | under the scheme the trustees receive interest from a participant in the |
| |
| 10 |
(2) | So far as the scheme requires the trustees to pay to the company an equivalent |
| |
amount as interest, no liability to income tax arises under Chapter 2 of Part 4 |
| |
for the trustees in respect of the interest they receive. |
| |
753 | Interest on repayment of student loan |
| |
(1) | No liability to income tax arises in respect of interest if— |
| 15 |
(a) | it is paid to a person to whom a student loan has been made, and |
| |
(b) | it relates to an amount repaid to the person after being recovered from |
| |
the person in respect of the loan. |
| |
(2) | In this section “student loan” means a loan made under— |
| |
section 22 of the Teaching and Higher Education Act 1998 (c. 30), |
| 20 |
section 73(f) of the Education (Scotland) Act 1980 (c. 44), or |
| |
Article 3 of the Education (Student Support) (Northern Ireland) Order |
| |
1998 (S.I. 1998/1760 (N.I. 14)). |
| |
754 | Redemption of funding bonds |
| |
(1) | The redemption of funding bonds is not treated as the payment of interest on |
| 25 |
a debt for income tax purposes if their issue was treated under section 380 of |
| |
this Act or section 582(1) of ICTA as the payment of interest on the debt. |
| |
(2) | In this section “funding bonds” includes any bonds, stocks, shares, securities or |
| |
certificates of indebtedness. |
| |
755 | Interest on foreign currency securities etc. owned by non-UK residents |
| 30 |
(1) | This section applies to interest on— |
| |
(a) | such foreign currency securities issued by a local authority or a |
| |
statutory corporation as the Treasury direct, and |
| |
(b) | such foreign currency loans made to a statutory corporation as the |
| |
| 35 |
(2) | No liability to income tax arises in respect of interest to which this section |
| |
| |
(a) | in the case of interest on a security, its beneficial owner is a non-UK |
| |
| |
(b) | in the case of interest on a loan, the person for the time being entitled to |
| 40 |
repayment or eventual repayment is a non-UK resident. |
| |
|
| |
|
| |
|
(3) | But interest is not exempt under subsection (2) because a person is a non-UK |
| |
resident if it is treated as another person’s income under— |
| |
Chapter 5 of Part 5 (settlements: amounts treated as income of settlor), or |
| |
Chapter 3 of Part 17 of ICTA (anti-avoidance provisions: transfer of assets |
| |
| 5 |
| |
“company” means a company, as defined in section 735(1)(a) of the |
| |
Companies Act 1985 (c. 6) or Article 3(1)(a) of the Companies (Northern |
| |
Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)), |
| |
“foreign currency”, in relation to loans and securities, has the meaning |
| 10 |
given by section 756, and |
| |
“statutory corporation” means— |
| |
(a) | a corporation incorporated by an Act (other than a company), or |
| |
(b) | any other corporation on which functions connected with |
| |
carrying on an undertaking are conferred by an Act or by an |
| 15 |
order made under or confirmed by an Act. |
| |
756 | Which securities and loans are foreign currency ones for section 755 |
| |
(1) | For the purposes of section 755, a security or loan is a foreign currency one if |
| |
under its terms the currency to be used for repayment is not sterling. |
| |
(2) | Subsection (1) is subject to the following qualifications. |
| 20 |
(3) | A security issued before 6th April 1982 is a foreign currency one if under its |
| |
terms the currency to be used for repayment is not that of a country specified |
| |
in Schedule 1 to the Exchange Control Act 1947 (c. 14) at the time of the issue |
| |
| |
(4) | A loan made before that date is a foreign currency one if under its terms the |
| 25 |
currency to be used for repayment is not that of a country specified in that |
| |
Schedule at the time the loan was made. |
| |
(5) | If in the case of a security there is an option as to the currency to be used for |
| |
repayment, the security is only to be treated as a foreign currency one if the |
| |
option is exercisable only by its holder. |
| 30 |
(6) | If in the case of a loan there is an option as to the currency to be used for |
| |
repayment, the loan is only to be treated as a foreign currency one if the option |
| |
is exercisable only by the person for the time being entitled to repayment or |
| |
| |
Interest and royalty payments |
| 35 |
757 | Interest and royalty payments: introduction |
| |
(1) | Sections 758 to 767 make provision for an exemption from income tax in respect |
| |
of certain interest and royalty payments. |
| |
(2) | They give effect to Council Directive 2003/49/EC of 3rd June 2003 on a |
| |
common system of taxation applicable to interest and royalty payments made |
| 40 |
between associated companies of different member States (“the Directive”). |
| |
| |
(a) | section 758 sets out the conditions to be met for the exemption to apply, |
| |
|
| |
|
| |
|
(b) | sections 759 to 761 explain certain terms used in those conditions, |
| |
(c) | section 762 confers powers on the Board to make regulations about |
| |
| |
(d) | sections 763 and 764 make provision for limiting the exemption in the |
| |
case of certain special relationships, |
| 5 |
(e) | section 765 contains anti-avoidance provisions, |
| |
(f) | section 766 contains interpretation provisions, and |
| |
(g) | section 767 confers power on the Treasury to amend references in |
| |
sections 757 to 766 to the Directive. |
| |
758 | Exemption for certain interest and royalty payments |
| 10 |
(1) | No liability to income tax arises in respect of a payment of interest or a |
| |
payment of a royalty if, at the time the payment is made, conditions A to D are |
| |
| |
(2) | Condition A is that the person making the payment is— |
| |
(a) | a UK company, but not such a company’s permanent establishment in |
| 15 |
a territory other than the United Kingdom, or |
| |
(b) | a UK permanent establishment of an EU company. |
| |
| See section 759 as to when a permanent establishment is to be treated as the |
| |
person making the payment. |
| |
(3) | Condition B is that the person beneficially entitled to the income in respect of |
| 20 |
which the payment is made is an EU company, but not such a company’s UK |
| |
permanent establishment or non-EU permanent establishment. |
| |
| See section 760 as to when a permanent establishment is to be treated as the |
| |
person beneficially entitled to the income in respect of which the payment is |
| |
| 25 |
(4) | Condition C is that the company in condition A and the company in condition |
| |
B are 25% associates (see section 761). |
| |
(5) | Condition D is that, if the payment is a payment of interest, the Board of Inland |
| |
Revenue has issued an exemption notice in accordance with regulations under |
| |
| 30 |
(6) | This section is subject to— |
| |
sections 763 and 764 (special relationships), and |
| |
section 765 (anti-avoidance). |
| |
759 | The person making the payment |
| |
(1) | This section supplements condition A in section 758. |
| 35 |
(2) | It applies in a case where a company is resident in one territory and has a |
| |
permanent establishment in another territory. |
| |
(3) | The permanent establishment (and not the company) is to be treated as the |
| |
person making the payment so far as (within the meaning of Article 1(3) of the |
| |
Directive) the payment represents a tax-deductible expense for the permanent |
| 40 |
establishment in the territory in which it is situated. |
| |
|
| |
|