Income Tax Act 2007

Income Tax Act 2007

2007 CHAPTER 3

Commentary on Sections

Part 14: Income tax liability: miscellaneous rules

Overview

Chapter 1: Limits on liability to income tax of non‑UK residents

Overview

Section 813: Meaning of “disregarded income”

2380. This section sets out the various descriptions of income which are defined as “disregarded income”. It is based on section 128(2) and (3) of FA 1995.

2381. Subsection (2) provides that income is not disregarded income if the non‑UK resident has a UK representative in relation to the income. This is the case if, for example, the non‑UK resident has income within the description of disregarded savings and investment income in section 825 which is brought into account in computing the profits of a manufacturing business carried on by the non‑UK resident through a branch in the United Kingdom.

2382. The definition of “disregarded pension income” in subsection (3) is based on section 128(3)(cc), (cca) and (cd) of FA 1995. Section 128(3)(cd) of FA 1995 relates to income which arises from a source in the United Kingdom and is chargeable to tax under Part 9 of ITEPA because section 609, 610 or 611 of that Act applies to it.

2383. Each of sections 609, 610 and 611 of ITEPA states that the section applies to an annuity which arises from a source outside the United Kingdom only if it is paid to a person resident in the United Kingdom. The definition of disregarded pension income omits the reference to the income arising from a source in the United Kingdom, on the basis that the wording of those sections of ITEPA makes it unnecessary.