Corporation Tax Act 2010

Corporation Tax Act 2010

2010 CHAPTER 4

Introduction

Part 24: Corporation Tax Acts definitions etc

Chapter 2: Permanent establishments

Section 1149: Application of 20% rule to collective investment schemes

3276. This section modifies the 20% rule where the non-UK resident company is a participant in a collective investment scheme. It is based on paragraph 5 of Schedule 26 to FA 2003.

3277. This section applies at the level of the scheme itself, treating the scheme as if it were a non-UK resident company, see subsection (3).

3278. A minor drafting change has been made in subsection (3) by substituting reference to a non-UK resident company for the reference in paragraph 5(2) of Schedule 26 to FA 2003 to a company resident outside the United Kingdom. This has been done to clarify the assumption and in this context does not change the effect of the law. The same minor drafting change was made in section 824(3) of ITA.

3279. Subsection (4) applies to a scheme which, if it was assumed to be a non-UK resident company, would not be regarded as carrying on a trade in the United Kingdom. The 20% rule is treated as satisfied in relation to such a scheme.

3280. Subsection (5) applies to a scheme which, if it was assumed to be a non-UK resident company, would be regarded as carrying on a trade in the United Kingdom. The 20% rule applies to such a scheme with the modifications in subsection (6).