Section 167 Small and medium-sized enterprises: exceptions from exemptionC1

(1)

Subsections (2) and (3) set out exceptions to section 166(1).

(2)

The first exception is if the small or medium-sized enterprise elects for section 166(1) not to apply in relation to the chargeable period.

Any such election is irrevocable.

(3)

The second exception is if—

(a)

the other affected person, or

(b)

a party to a relevant transaction,

is, at the time when the actual provision is or was made or imposed, a resident of a non-qualifying territory (whether or not that person is also a resident of a qualifying territory).

(4)

For the purposes of subsection (3)—

(a)

a “party to a relevant transaction” is a person who, if the actual provision is or was imposed by means of a series of transactions, is or was a party to one or more of those transactions, and

(b)

“qualifying territory” and “non-qualifying territory” are defined in section 173.

(5)

In subsection (3) “resident”, in relation to a territory—

(a)

means a person who, under the law of that territory, is liable to tax there by reason of the person's domicile, residence or place of management, but

(b)

does not include a person who is liable to tax in that territory in respect only of income from sources in that territory or capital situated there.

Annotations

Modifications

C1: Ss. 166-171 excluded (1.4.2010 with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 542(2), 1184(1) (with Sch. 2)

Notes on Part 4

Modifications

C1: Pt. 4 excluded by 2010 c. 4, s. 938N (as inserted (19.7.2011) by Finance Act 2011 (c. 11), Sch. 5 para. 2)
C2: Pt. 4 excluded (1.10.2011) by Postal Services Act 2011 (c. 5), s. 93(2)(3), Sch. 2 para. 6(2); S.I. 2011/2329, art. 3
C3: Pt. 4 excluded (1.4.2012) by Budget Responsibility and National Audit Act 2011 (c. 4), s. 29, Sch. 4 para. 3(2); S.I. 2011/2576, art. 5
C4: Pt. 4 excluded (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 129(11) (with s. 147, Sch. 17)

Notes on Chapter 3

Modifications

C1: Pt. 4 Chs. 1 and 3-6 applied (1.4.2022 in relation to accounting periods beginning on or after that date) by Finance Act 2022 (c. 3), s. 51(1), Sch. 9 paras. 3, 4