Amendments to Chapter 2A of Part 5 of ITTOIA 2005

10.  After section 608M insert—

“Exemption where income of opaque partnership taxable in full treaty territory

608MA.— (1) This section applies where—

(a) under the laws of a full treaty territory, a partnership is regarded for tax purposes as an entity separate and distinct from the partners,

(b) the partnership is resident in the territory throughout a tax year,

(c) UK-derived amounts arise to the partnership in the tax year, and

(d) the UK-derived amounts are chargeable to tax under the laws of the territory.

(2) In the application of section 608A to a partner for the tax year, no account is to be taken of the UK-derived amounts.

(3) For the purposes of subsection (1)(b), the partnership is “resident” in a territory if (and only if) it is resident there by virtue of section 608D(2) (references there to be a person being read as references to the partnership).”.