(1)No liability to income tax arises in respect of a payment of interest or a payment of a royalty if, at the time the payment is made, conditions A to D are met.
(2)Condition A is that the person making the payment is—
(a)a UK company, but not such a company's permanent establishment in a territory other than the United Kingdom, or
(b)a UK permanent establishment of an EU company.
See section 759 as to when a permanent establishment is to be treated as the person making the payment.
(3)Condition B is that the person beneficially entitled to the income in respect of which the payment is made is an EU company, but not such a company's UK permanent establishment or non-EU permanent establishment.
See section 760 as to when a permanent establishment is to be treated as the person beneficially entitled to the income in respect of which the payment is made.
(4)Condition C is that the company in condition A and the company in condition B are 25% associates (see section 761).
(5)Condition D is that, if the payment is a payment of interest, [F1the Commissioners for Her Majesty’s Revenue and Customs][F2have] issued an exemption notice in accordance with regulations under section 762.
(6)This section is subject to—
sections 763 and 764 (special relationships), and
section 765 (anti-avoidance).
Textual Amendments
F1Words in s. 758(5) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), ss. 50, 53(1), Sch. 4 para. 132(2); S.I. 2005/1126, art. 2(2)(h)
F2Word in s. 758(5) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), ss. 50, 53(1), Sch. 4 para. 133(6); S.I. 2005/1126, art. 2(2)(h)