Finance Act 1996

33 (1) Section 584 of the Taxes Act 1988 (relief for unremittable overseas income) shall be amended in accordance with the following provisions of this paragraph.

(2) For subsections (2) and (3) (the account to be taken of overseas income which the Board are satisfied is unremittable) there shall be substituted—

“(2) Subject to subsection (2A) below, where a person so chargeable makes a claim under this subsection in relation to any overseas income—

(a) which is unremittable; and

(b) to which subsection (1)(a) above will continue to apply notwithstanding any reasonable endeavours on his part,

then, in the first instance, account shall not be taken of that income, and tax shall be assessed, or, in the case of corporation tax, assessable, and shall be charged on all persons concerned and for all periods accordingly.

(2A) If on any date paragraph (a) or (b) of subsection (2) above ceases to apply to any part of any overseas income in relation to which a claim has been made under that subsection—

(a) that part of the income shall be treated as income arising on that date, and

(b) account shall be taken of it, and of any tax payable in respect of it under the law of the territory where it arises, according to their value at that date.”

(3) In subsection (4) (company chargeable to corporation tax in respect of source of income that it has ceased to possess) for “a company becomes chargeable to corporation tax in respect of income from any source by virtue of subsections (2) and (3)” there shall be substituted “a person becomes chargeable to income tax or corporation tax in respect of income from any source by virtue of subsection (2) or (2A)”.

(4) In subsection (5) (where payment made by ECGD in respect of income, conditions in subsection (2) treated as not satisfied) for the words following “treated as income” there shall be substituted “to which paragraphs (a) and (b) of subsection (2) above do not apply (and accordingly cannot cease to apply)”.

(5) For subsection (6) (delivery of notices under subsection (2) and making of assessments required by such notices) there shall be substituted—

“(6) A claim under subsection (2) above—

(a) for the purposes of income tax, shall be made on or before the first anniversary of the 31st January next following the year of assessment in which the income arises;

(b) for the purposes of corporation tax, shall be made no later than two years after the end of the accounting period in which the income arises.”

(6) In subsection (7) (charge to tax on executors and administrators) after “(2)” there shall be inserted “or (2A)”.

(7) In subsection (8) (how to determine the amount of unremittable overseas income) for “(3)” there shall be substituted “(2A)”.