Chapter 10: Supplementary
Section 287: Provisions which must be given priority over this Part
1017.This section provides the rules to determine which Part takes priority in the event of any overlap of the charge on the profits of a trade and the charge on the profits of an overseas property business or the charge under Chapter 7 or 8 of this Part. It is based on sections 18 and 70A of ICTA.
1018.The definitions of Schedule D Cases I and VI are in section 18 of ICTA. Those definitions deal with any overlap between a trade and the profits of a UK concern or the profits of a UK electric line wayleave. Case VI charges income that is not charged under any other case. So this section gives trading income (Case I in the source legislation) priority.
1019.The section also gives statutory effect to the Crown Option between an overseas property business and a United Kingdom trade. See Change 55 in Annex 1. The corresponding rules for income tax are in section 261 of ITTOIA.
Section 288: Priority between Chapters within this Part
1020.This section gives an order of priority between Chapters 3, 7 and 8 of this Part. It is based on sections 119 and 120 of ICTA. The corresponding rules for income tax are in section 262 of ITTOIA.
1021.Subsection (3) deals with income that falls within both Chapter 7 and Chapter 8 of this Part. See Change 6 in Annex 1 and the commentary on section 45.
Section 289: Effect of company starting or ceasing to be within charge to corporation tax
1022.This section treats a company as starting or ceasing to carry on a property business in particular circumstances. It is based on section 337 of ICTA. The corresponding rule for income tax is in section 362 of ITTOIA.
1023.This section applies when a company moves into or out of the corporation tax regime. Non-UK resident companies are within the charge to corporation tax only if they are trading, are trading in the United Kingdom, and through a permanent establishment in the United Kingdom. Then they are chargeable to corporation tax on all the profits attributable to that permanent establishment. If those profits include the profits of a property business, first meeting or ceasing to meet those conditions will result in a change of taxing regime from income tax to corporation tax or vice versa.
Section 290: Overseas property businesses and overseas land: adaptation of rules
1024.This section sets out how the rules for United Kingdom property businesses are to be adapted to apply to overseas property businesses. It is based on section 70A of ICTA. The corresponding rule for income tax is in section 363 of ITTOIA.
1025.The section explains how to apply the UK property business rules if foreign property law does not correspond exactly with United Kingdom property law.
Section 291: Meaning of “lease” and “premises”
1026.This section is interpretative. It is based on section 24(1) of ICTA. The corresponding rule for income tax is in section 364 of ITTOIA.
