Section 906 | Certain royalties etc where usual place of abode of owner is abroad

(1)This section applies to any payment made in a tax year where condition A or condition B is met.^F1

(2)Condition A is that—^F1

(a)the payment is a royalty, or a payment of any other kind, for the use of, or the right to use, intellectual property (see section 907),^F1

(b)the usual place of abode of the owner of the intellectual property is outside the United Kingdom, and^F1

(c)the payment is charged to income tax or corporation tax.^F1

(3)Condition B is that—^F1

(a)the payment is a payment of sums payable periodically in respect of intellectual property,^F1

(b)the person entitled to those sums (“the assignor”) assigned the intellectual property to another person,^F1

(c)the usual place of abode of the assignor is outside the United Kingdom, and^F1

(d)the payment is charged to income tax or corporation tax.^F1

(4)But this section does not apply if the payment is made in respect of copies of works, or articles, which have been exported from the United Kingdom for distribution outside the United Kingdom.

(5)The person by or through whom the payment is made must, on making it, deduct from it a sum representing income tax on it at the basic rate in force for the tax year.

(6)See—

(a)Chapter 8 which makes special provision in relation to royalties (double taxation arrangements: deduction at treaty rate and EU companies: discretion to pay gross), and

(b)Chapter 11 (payments between companies etc) for an exception from the duty to deduct sums representing income tax under this section.

(7)For provision about the collection of income tax in respect of a payment from which a sum must be deducted under this section—

(a)see Chapter 15 if the person making the payment is a UK resident company, and

(b)otherwise see Chapter 16.

(8)If a payment to which this section applies is also one to which a provision of Chapter 6 applies, it is treated as not being a payment to which a provision of Chapter 6 applies.