Paragraph 5 Qualifying income tax expense

United Kingdom

F1(1)

In this Part of this Schedule, “qualifying income tax expense” means income tax expense adjusted to exclude—

(a)

any amount that does not relate to covered taxes, F2...

(b)

any amount that relates to an uncertain tax position F3, and

(c)

any amount that relates to a deferred tax asset arising as described in section 185(7A) or (7B) or that relates to a relevant pre-entry deferred tax liability.

F4(2)

For the purposes of this Part of this Schedule, any amount of qualifying income tax expense that is in respect of profits of a permanent establishment and that is incurred in the territory of the permanent establishment is to be regarded as the expense of that permanent establishment (rather than of the main entity).

Annotations

Textual amendments

F1: Sch. 16 para. 5 renumbered as Sch. 16 para. 5(1) (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 46(7)(a), 72(4)
F2: Word in Sch. 16 para. 5(1) omitted (in relation to accounting periods ending on or after 21.7.2025) by virtue of Finance Act 2026 (c. 11), Sch. 8 paras. 21(3)(a)(i), 53(2)
F3: Sch. 16 para. 5(1)(c) and word inserted (in relation to accounting periods ending on or after 21.7.2025) by Finance Act 2026 (c. 11), Sch. 8 paras. 21(3)(a)(ii), 53(2)
F4: Sch. 16 para. 5(2) inserted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 46(7)(b), 72(4)

Notes on Chapter 1

Textual amendments

F1: Words in Sch. 16 Pt. 2 Ch. 1 heading substituted (in relation to accounting periods commencing on or after 31.12.2024) by Finance Act 2025 (c. 8), Sch. 4 paras. 6(2), 10