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Section 71A Circumstances in which section 71B appliesF1

(1)

Section 71B has effect in relation to an accounting period of a company resident in the United Kingdom which has an overseas permanent establishment (“the PE”) if, in that or any earlier accounting period, condition A or B is met.

(2)

Condition A is met in relation to an accounting period if, for the purposes of any tax chargeable under the law of the PE territory—

(a)

a loss or other amount attributable to the PE is deducted from or otherwise allowed against amounts of any person other than the company, and

(b)

as a result, there is a decrease in the tax chargeable in respect of a foreign taxable period ending in the accounting period.

(3)

Condition B is met in relation to an accounting period if—

(a)

tax is chargeable under the law of the PE territory in respect of the aggregate profits, or aggregate profits or gains, of the PE and persons other than the company,

(b)

a loss or other amount attributable to the PE is deducted from or otherwise allowed against, or is brought into account as a deduction or other allowance in calculating, amounts other than amounts of the PE, and

(c)

as a result, there is a decrease in the tax chargeable in respect of a foreign taxable period ending in the accounting period.

(4)

In this section—

  • “foreign taxable period” means any period in respect of which the tax in question is chargeable under the law of the PE territory, and

  • “the PE territory” means the territory in which the PE is situated.

Annotations

Textual amendments

F1

Ss. 71A, 71B and cross-heading inserted (with effect in accordance with s. 30(5)(7) of the amending Act) by Finance Act 2018 (c. 3), s. 30(2)

Notes on Part 2

Modifications

C1

Pt. 2 modified by 1988 c. 1, Sch. 19ABA paras. 26-28 (as inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 34(3) (with Sch. 9 paras. 1-9, 22))

C2

Pt. 2 applied by 2010 c. 4, s. 269DL(6) (as inserted (with effect in accordance with Sch. 3 Pt. 3 of the amending Act) by Finance (No. 2) Act 2015 (c. 33), Sch. 3 para. 1)

Notes on Chapter 2

Modifications

C1

Pt. 2 applied by 2010 c. 4, s. 269DL(6) (as inserted (with effect in accordance with Sch. 3 Pt. 3 of the amending Act) by Finance (No. 2) Act 2015 (c. 33), Sch. 3 para. 1)