Part 2

Charge to corporation tax: basic provisions
Chapter 1

The charge to corporation tax

General scheme of corporation tax

Territorial scope of charge
5
1
A UK resident company is chargeable to corporation tax on income on all its profits wherever arising (but see Chapter 3A for an exemption from charge in respect of profits of foreign permanent establishments).
2
A non-UK resident company is
within the charge to corporation tax on income
only if—
a
it carries on a trade of dealing in or developing
UK
land (see section 5B),
...
b
it carries on a trade in the United Kingdom (other than a trade of dealing in or developing
UK
land) through a permanent establishment in the United Kingdom
,
c
it carries on a UK property business, or
d
it has other UK property income.
2A
A non-UK resident company which carries on a trade of dealing in or developing
UK
land is
chargeable to corporation tax on income
on all its profits wherever arising that are profits of that trade.
3
A non-UK resident company which carries on a trade in the United Kingdom through a permanent establishment in the United Kingdom is chargeable to corporation tax on income on all its profits wherever arising that are chargeable profits as defined in section 19 (profits attributable to its permanent establishment in the United Kingdom).
3A
A non-UK resident company which carries on a UK property business is chargeable to corporation tax on income on all its profits that are—
a
profits of that business, or
b
profits arising from loan relationships or derivative contracts that the company is a party to for the purposes of that business.
3B
A non-UK resident company which has other UK property income is chargeable to corporation tax on income on all its profits that—
a
consist of that income, or
b
are profits arising from loan relationships or derivative contracts that the company is a party to for the purposes of enabling it to generate that income.
4
Subsections (1) and (2A) to (3B) are subject to any exceptions provided for by the Corporation Tax Acts.
5
The territorial scope of the charge to corporation tax on chargeable gains is given by section 2B of TCGA 1992.
6
In this Part “other UK property income” means income dealt with by any of the following Chapters of Part 4—
a
Chapter 7 (rent receivable in connection with a UK section 39(4) concern);
b
Chapter 8 (rent receivable for UK electric-line wayleaves);
c
Chapter 9 (post-cessation receipts arising from a UK property business).
Words in s. 5(1) inserted (19.7.2011) by Finance Act 2011 (c. 11), Sch. 13 para. 3, 31
S. 5(2)(c)(d) inserted (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 paras. 2(b), 35 (with Sch. 5 para. 36)
Words in s. 5(2) substituted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 110(3)
Words in s. 5(1) substituted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 110(2)
Word in s. 5(2)(a) omitted (6.4.2020) by virtue of Finance Act 2019 (c. 1), Sch. 5 paras. 2(a), 35 (with Sch. 5 para. 36)
S. 5(6) inserted (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 paras. 5, 35 (with Sch. 5 para. 36)
Words in s. 5(3) substituted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 110(2)
S. 5(3A)(3B) inserted (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 para. 3, 35 (with Sch. 5 para. 36)
S. 5(5) inserted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 110(4)
S. 5(2A) inserted (with effect in accordance with s. 81 of the amending Act) by Finance Act 2016 (c. 24), s. 76(3) (and also with effect in accordance with Finance (No. 2) Act 2017 (c. 32), s. 39(1)(2))
Words in s. 5(4) substituted (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 paras. 4, 35 (with Sch. 5 para. 36)
S. 5(2) substituted (with effect in accordance with s. 81 of the amending Act) by Finance Act 2016 (c. 24), s. 76(2) (and also with effect in accordance with Finance (No. 2) Act 2017 (c. 32), s. 39(1)(2))
Words in s. 5(2A) substituted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 110(2)