Taxes Management Act 1970

78 Method of charging non-residents. [1952 s.369.] U.K.

(1) Subject to [subsection (2) below and F1 ] section [43 F2 ] of the principal Act (Schedule A etc.) a person not resident in the United Kingdom, whether a British subject or not, shall be assessable and chargeable to income tax in the name of any such trustee, guardian, tutor, curator or committee as is mentioned in section 72 of this Act, or of any branch or agent, whether the branch or agent has the receipt of the profits or gains or not, in like manner and to the like amount as such non-resident person would be assessed and charged if he were resident in the United Kingdom and in the actual receipt of such profits or gains F3 .

[(2) Subject to the following provisions of this section, a person who is not resident in the United Kingdom shall not, by virtue of this section, be chargeable in the name of an agent in respect of profits or gains arising from investment transactions carried out by the agent if—

(a) the agent is carrying on a business of providing investment management services to a number of clients of whom the non-resident person is one; and

(b) the investment transactions concerned were carried out in the ordinary course of the business referred to in paragraph (a) above; and

(c) the remuneration which the agent receives for the provision of investment management services to the non-resident person is at a rate which is not less than that which is customary for that class of business; and

(d) in the case of profits or gains which are chargeable to tax as the profits or income of the non-resident person from carrying on a trade in the United Kingdom through a branch or agency, the agent carrying out the investment transaction is also the agency through which the trade is carried on;

and in the case of an agent who provides investment management services as part only of a business, paragraphs (a) to (d) above shall apply as if that part were a separate business.

(3) In subsection (2) above “investment transactions” means—

(a) transactions in shares, stock or securities of any other description, excluding commodity or financial futures,

(b) transactions on a recognised futures exchange, within the meaning of the Capital Gains Tax Act 1979, and

(c) the placing of money at interest,

and for the purposes of that subsection an agent carries out such a transaction on behalf of his client whether he undertakes the transaction himself or by giving instructions to another person.

(4) Subsection (2) above does not apply to profits or gains which constitute income of an offshore fund, within the meaning of Chapter [V of Part XVII of the principal Act F4 ].

(5) Subsection (2) above does not apply if the non-resident person and the agent are connected with each other, within the terms of section [839 F4 ] of the principal Act F5 .]

Textual Amendments

F1 Finance Act 1985 s.50for 1985—86et seq. for profits or gains chargeable to income tax and for accounting periods ending on or after1April1985for profits etc. chargeable to corporation tax.

F2 Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1) Sch. 29 para. 32.

F3 See Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1) s. 43—s. 78not applicable to tax on profits within Sch. A,or in certain cases Sch. D Case VI,where payment made direct to person whose usual place of abode is outside the United Kingdom.

F4 Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1) Sch. 29 para. 32.

F5 Finance Act 1985 s.50for1985—86 et seq. for profits or gains chargeable to income tax and for accounting periods ending on or after1April1985for profits etc. chargeable to corporation tax.