|
| |
|
| |
852 | Manufactured interest on UK securities: payments by UK residents etc |
| |
(1) | This section applies if a person who pays manufactured interest as mentioned |
| |
| |
| 5 |
(b) | pays the manufactured interest in the course of a trade carried on in the |
| |
United Kingdom through a branch or agency. |
| |
(2) | The payer of the manufactured interest must, on making the payment, deduct |
| |
from the gross amount of the manufactured interest a sum representing |
| |
income tax on it at the savings rate in force for the tax year in which the |
| 10 |
| |
(3) | The “gross amount” of manufactured interest is equal to the gross amount of |
| |
the interest of which it is representative. |
| |
(4) | This section is subject (in particular) to— |
| |
section 583 (manufactured payments exceeding underlying payments), |
| 15 |
section 585 (manufactured payments: power to deal with special cases), |
| |
section 854 (cases where interest on underlying securities paid gross), and |
| |
Chapter 11 (payments between companies etc: exception from duties to |
| |
| |
(5) | For provision about the collection of income tax in respect of a payment from |
| 20 |
which a sum must be deducted under this section— |
| |
(a) | see Chapter 15 if the payer of the manufactured interest is a company, |
| |
| |
(b) | otherwise see Chapter 16. |
| |
853 | Foreign payers of manufactured interest: the reverse charge |
| 25 |
(1) | This section applies if a person who pays manufactured interest as mentioned |
| |
| |
(a) | is non-UK resident, and |
| |
(b) | pays the manufactured interest otherwise than in the course of a trade |
| |
carried on in the United Kingdom through a branch or agency. |
| 30 |
(2) | The recipient must account for and pay income tax in respect of the |
| |
manufactured interest if the recipient— |
| |
| |
(b) | is non-UK resident but receives the manufactured interest for the |
| |
purposes of a trade carried on by the recipient in the United Kingdom |
| 35 |
through a branch or agency. |
| |
(3) | The amount of income tax to be accounted for and paid is equal to the amount |
| |
of the sum representing income tax which the payer would have been required |
| |
to deduct under section 852(2) if the payer had been UK resident. |
| |
(4) | If the payer would not have been required to deduct any sum under section |
| 40 |
852(2), the recipient is not required to account for and pay any income tax |
| |
| |
(5) | For examples of cases in which subsection (4) applies see (in particular)— |
| |
|
| |
|
| |
|
section 854 (cases where interest on underlying securities paid gross), and |
| |
Chapter 11 (payments between companies etc: exception from duties to |
| |
| |
(6) | This section is subject to— |
| |
section 583 (manufactured payments exceeding underlying payments), |
| 5 |
| |
section 585 (manufactured payments: power to deal with special cases). |
| |
(7) | Provision about the collection of income tax required to be accounted for and |
| |
paid under this section may be included in regulations under section 586. |
| |
854 | Cases where interest on underlying securities paid gross |
| 10 |
(1) | This section applies to manufactured interest which is representative of |
| |
| |
(a) | gilt-edged securities, or |
| |
(b) | securities which are not gilt-edged securities but on which the interest |
| |
is payable without deduction of income tax. |
| 15 |
(2) | Section 852(2) does not require any deduction of a sum representing income tax |
| |
to be made on the payment of the manufactured interest. |
| |
(3) | In this section “securities” includes loan stock or any similar security. |
| |
Manufactured overseas dividends |
| |
855 | Manufactured overseas dividends: payments by UK residents etc |
| 20 |
(1) | This section applies if a person who pays a manufactured overseas dividend as |
| |
mentioned in section 581(1)— |
| |
| |
(b) | pays the manufactured overseas dividend in the course of a trade |
| |
carried on through a branch or agency in the United Kingdom. |
| 25 |
(2) | The payer of the manufactured overseas dividend must, on making the |
| |
payment, deduct from the gross amount of the manufactured overseas |
| |
dividend a sum representing income tax equal to the relevant withholding tax |
| |
| |
(3) | This section is subject (in particular) to— |
| 30 |
section 583 (manufactured payments exceeding underlying payments), |
| |
| |
section 585 (manufactured payments: power to deal with special cases). |
| |
(4) | Provision about the collection of income tax in respect of a payment from |
| |
which a sum must be deducted under this section may be included in |
| 35 |
regulations under section 586 or 858. |
| |
856 | Foreign payers of manufactured overseas dividends: the reverse charge |
| |
(1) | This section applies if a person who pays a manufactured overseas dividend as |
| |
mentioned in section 581(1)— |
| |
(a) | is non-UK resident, and |
| 40 |
|
| |
|
| |
|
(b) | pays the manufactured overseas dividend otherwise than in the course |
| |
of a trade carried on through a branch or agency in the United |
| |
| |
(2) | The recipient must account for and pay income tax in respect of the |
| |
manufactured overseas dividend if the recipient— |
| 5 |
| |
(b) | is non-UK resident but receives the manufactured overseas dividend |
| |
for the purposes of a trade carried on by the recipient through a branch |
| |
or agency in the United Kingdom. |
| |
(3) | The amount of income tax to be accounted for and paid is equal to the amount |
| 10 |
of the sum representing income tax which the payer would have been required |
| |
to deduct under section 855(2) if the payer had been UK resident. |
| |
(4) | If the payer would not have been required to deduct any sum under section |
| |
855(2), the recipient is not required to account for and pay any income tax |
| |
| 15 |
(5) | This section is subject to— |
| |
section 583 (manufactured payments exceeding underlying payments), |
| |
section 585 (manufactured payments: power to deal with special cases), |
| |
| |
section 857 (power to reduce liability under this section). |
| 20 |
(6) | Provision about the collection of income tax required to be accounted for and |
| |
paid under this section may be included in regulations under section 586. |
| |
857 | Power to reduce section 856 liability |
| |
(1) | The Treasury may by regulations provide for a reduction in the amount of tax |
| |
to be accounted for and paid as a result of section 856. |
| 25 |
(2) | The reduction must be a reduction, to such extent and for such purposes as |
| |
may be determined under the regulations, by reference to amounts of overseas |
| |
tax charged on, or in respect of— |
| |
(a) | the making of the manufactured overseas dividend, or |
| |
(b) | the overseas dividend of which the manufactured overseas dividend is |
| 30 |
| |
858 | Power to provide set-off entitlement |
| |
(1) | The Treasury may by regulations provide for a person who, in any prescribed |
| |
period, pays a manufactured overseas dividend as mentioned in section 581(1) |
| |
| 35 |
(a) | to set off relevant amounts of tax suffered against relevant tax |
| |
| |
(b) | to account to the Commissioners for Her Majesty’s Revenue and |
| |
Customs for the balance or claim credit in respect of it. |
| |
(2) | Regulations under this section may— |
| 40 |
(a) | prescribe the circumstances in which relevant amounts of tax suffered |
| |
may be set off against relevant tax liabilities, and |
| |
|
| |
|
| |
|
(b) | provide for relevant amounts of tax suffered to be set off against |
| |
relevant tax liabilities in accordance with the regulations and so far as |
| |
| |
(3) | “Relevant amounts of tax suffered” are— |
| |
(a) | amounts of overseas tax in respect of overseas dividends received by |
| 5 |
the person in the prescribed period, |
| |
(b) | amounts of overseas tax charged on, or in respect of, the making of |
| |
manufactured overseas dividends received by the person in the |
| |
| |
| 10 |
(i) | deducted as a result of section 855, or |
| |
(ii) | accounted for and paid as a result of section 856, |
| |
| from any manufactured overseas dividends received by the person in |
| |
| |
(4) | “Relevant tax liabilities” are sums due from the person on account of the |
| 15 |
amounts deducted by the person as a result of section 855 from the |
| |
manufactured overseas dividends paid by the person in the prescribed period. |
| |
| |
“credit” includes credit against corporation tax, and |
| |
“prescribed” means prescribed in regulations under this section. |
| 20 |
| |
859 | Interpretation of Chapter |
| |
(1) | Expressions (except “prescribed”) used in this Chapter and in Chapter 2 of Part |
| |
11 (manufactured payments) have the same meaning in this Chapter as in that |
| |
| 25 |
(2) | References in this Chapter to a trade carried on through a branch or agency are |
| |
to be read, in relation to a company, as references to a trade carried on through |
| |
a permanent establishment. |
| |
860 | Regulation-making powers: general |
| |
Regulations under this Chapter may make different provision for different |
| 30 |
| |
| |
Deduction from non-commercial payments by companies |
| |
861 | Chargeable payments connected with exempt distributions |
| |
(1) | This section applies to any payment chargeable to tax under section 214(1) of |
| 35 |
ICTA (chargeable payments made within 5 years of an exempt distribution). |
| |
(2) | The person by or through whom the payment is made must, on making the |
| |
payment, deduct from it a sum representing income tax on it at the basic rate |
| |
in force for the tax year in which it is made. |
| |
|
| |
|
| |
|
(3) | See Chapter 11 (payments between companies etc) for an exception from the |
| |
duty to deduct sums representing income tax under this section. |
| |
(4) | For provision about the collection of income tax in respect of a payment from |
| |
which a sum must be deducted under this section— |
| |
(a) | see Chapter 15 if the person making the payment is a UK resident |
| 5 |
| |
(b) | otherwise see Chapter 16. |
| |
(5) | In this section “payment” does not include a transfer of money’s worth that is |
| |
treated as a payment for the purposes of section 214 of ICTA. |
| |
| 10 |
Payments between companies etc: exception from duties to deduct |
| |
| |
| |
(1) | This Chapter makes provision allowing some payments made by companies, |
| |
local authorities and qualifying partnerships to be paid gross where they |
| 15 |
would otherwise be subject to specified duties to deduct sums representing |
| |
income tax under this Part. |
| |
(2) | Section 863 disapplies specified duties to deduct where a payment is made by |
| |
a company, local authority or qualifying partnership which reasonably |
| |
believes that the payment is an excepted payment. |
| 20 |
(3) | Section 864 confers power on an officer of Revenue and Customs to disapply |
| |
section 863 by direction. |
| |
(4) | Section 865 defines “qualifying partnership”. |
| |
(5) | Sections 866 to 870 make provision as to when a payment is an excepted |
| |
| 25 |
(6) | Section 871 deals with what happens when a company, local authority or |
| |
qualifying partnership makes a payment without deducting a sum |
| |
representing income tax under a reasonable but incorrect belief that the |
| |
payment is an excepted payment. |
| |
Exception from duties to deduct for excepted payments |
| 30 |
863 | Exception from duties to deduct sums representing income tax |
| |
(1) | The duties to deduct sums representing income tax mentioned in subsection (2) |
| |
do not apply to a payment if— |
| |
(a) | it is made by a company, local authority or qualifying partnership, and |
| |
(b) | at the time the payment is made, the company, authority or partnership |
| 35 |
reasonably believes that it is an excepted payment. |
| |
(2) | The duties to deduct are those under— |
| |
(a) | section 807(2) (certain payments of yearly interest), |
| |
(b) | section 822(4) (payments in respect of building society securities), |
| |
|
| |
|
| |
|
(c) | section 834(4) (annual payments made by persons other than |
| |
| |
(d) | section 836(7) (patent royalties), |
| |
(e) | section 839(5) (certain royalty payments etc where the owner lives |
| |
| 5 |
(f) | section 843(2) (proceeds of a sale of patent rights paid to non-UK |
| |
| |
(g) | section 852(2) (manufactured interest on UK securities: payments by |
| |
| |
(h) | section 861(2) (chargeable payments connected with exempt |
| 10 |
| |
(3) | Subsection (1) has effect subject to any directions under section 864. |
| |
(4) | Subsection (1) does not apply to a payment made by a company, or qualifying |
| |
partnership, acting as trustee or agent for another person. |
| |
864 | Power to make directions disapplying section 863 |
| 15 |
(1) | An officer of Revenue and Customs may give a direction to a company, local |
| |
authority or qualifying partnership directing that section 863 is not to apply in |
| |
relation to any payment that— |
| |
(a) | is made by the company, authority or partnership after the giving of the |
| |
| 20 |
(b) | is specified in the direction or is of a description so specified. |
| |
(2) | A direction under this section may be given only if the officer has reasonable |
| |
grounds for believing, as respects each payment to which the direction relates, |
| |
that the payment will not be an excepted payment at the time it is made. |
| |
(3) | A direction under this section may be varied or revoked by a later direction. |
| 25 |
(4) | A variation or revocation of a direction under this section has effect only in |
| |
relation to payments made after the date of the variation or revocation. |
| |
865 | Meaning of “qualifying partnership” |
| |
For the purposes of this Chapter a partnership is a “qualifying partnership” if |
| |
any partner in the partnership is a company or a local authority. |
| 30 |
| |
866 | UK resident companies |
| |
A payment is an excepted payment if the person beneficially entitled to the |
| |
income in respect of which the payment is made is a UK resident company. |
| |
867 | Non-UK resident companies |
| 35 |
(1) | A payment is an excepted payment if each of the following conditions is met in |
| |
| |
(2) | The person beneficially entitled to the income in respect of which the payment |
| |
is made must be a non-UK resident company. |
| |
|
| |
|
| |
|
(3) | The non-UK resident company must carry on a trade in the United Kingdom |
| |
through a permanent establishment. |
| |
(4) | The payment must be one that is required to be brought into account in |
| |
calculating the chargeable profits (within the meaning given by section 11(2) of |
| |
ICTA) of the non-UK resident company. |
| 5 |
| |
(1) | A payment is an excepted payment if each of the following conditions is met in |
| |
| |
(2) | The person to whom the payment is made must be, or must be the nominee of, |
| |
the plan manager of a plan of a kind to which regulations under Chapter 3 of |
| 10 |
Part 6 of ITTOIA 2005 (income from individual investment plans) apply. |
| |
(3) | The plan manager must receive the payment in respect of investments under |
| |
| |
869 | Recipients who are to be paid gross |
| |
(1) | A payment is an excepted payment if it is made to, or to the nominee of, a |
| 15 |
recipient who is specified in subsection (2) as a recipient who is to be paid |
| |
| |
(2) | The following recipients are to be paid gross— |
| |
| |
(b) | a health service body within the meaning of section 519A(2) of ICTA, |
| 20 |
(c) | a public office or department of the Crown other than one mentioned |
| |
| |
| |
(e) | a body for the time being mentioned in section 507(1) of ICTA (bodies |
| |
that are allowed the same exemption from tax as charitable companies |
| 25 |
the whole income of which is applied to charitable purposes), |
| |
(f) | an Association which complies with the conditions in section 508(1) of |
| |
ICTA (scientific research organisations), |
| |
(g) | the scheme administrator of a registered pension scheme, |
| |
(h) | the sub-scheme administrator of a sub-scheme which forms part of a |
| 30 |
split scheme pursuant to the Registered Pensions (Splitting of Schemes) |
| |
Regulations 2006 (S.I. 2006/569), |
| |
(i) | the trustees of a scheme entitled to exemption under section 613(4) of |
| |
ICTA (Parliamentary pension funds), and |
| |
(j) | the persons entitled to receive the income of a fund entitled to |
| 35 |
exemption under section 614(3) of ICTA (certain colonial, etc pension |
| |
| |
(3) | The Treasury may by order amend this section so as to add to, restrict or |
| |
otherwise alter the persons or bodies who are to be paid gross. |
| |
| 40 |
(1) | A payment is an excepted payment if each of the following conditions are met. |
| |
(2) | A partnership must be beneficially entitled to the income in respect of which |
| |
| |
|
| |
|