Part 17Partnerships

Firms with a foreign element

1266Resident partners and double taxation agreements

1

This section applies if—

a

a UK resident company (“the partner”) is a member of a firm which—

i

resides outside the United Kingdom, or

ii

carries on a trade the control and management of which is outside the United Kingdom, and

b

by virtue of any arrangements having effect under F1section 2(1) of TIOPA 2010 (“the arrangements”) any of the income of the firm is relieved from corporation tax in the United Kingdom.

2

The partner is liable to corporation tax on the partner's share of the income of the firm despite the arrangements.

3

If the partner's share of the income of the firm consists of or includes a share in a qualifying distribution made by a UK resident company, the partner (and not the firm) is, despite the arrangements, entitled to the share of the tax credit which corresponds to the partner's share of the distribution.

4

For the purposes of this section the members of a firm include any company which is entitled to a share of the income of the firm.