Summary
1.Section 60 amends two of the rules contained in legislation introduced in Finance Act 2005 to limit the credit for foreign tax paid on trade receipts of a bank or a company associated with a bank to no more than the corporation tax arising on the relevant part of the trade profits. The clause ensures that, in calculating the amount of double taxation relief (DTR) available, a) a reasonable proportion of a bank’s notional funding costs over all its transactions must be deducted, and that this cannot be avoided by the bank allocating a specific source of funds to specific transactions and b) clarifies the existing legislation that prevents banks avoiding the intention of the DTR legislation by artificially arranging for income to be received by a non–banking company in the bank’s group.
