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Legislation
Taxation (International and Other Provisions) Act 2010

Crossheading Limit on, and reduction of, credit against income tax

  • Section 36 Amount of limit
  • Section 37 Credit against tax on trade income: further rules
  • Section 38 Credit against tax on royalties: further rules
  • Section 39 Credit reduced by reference to accrued income losses
  1. Limit on, and reduction of, credit against income tax
  2. Credit against tax on trade income: further rules

Section 37 | Credit against tax on trade income: further rules

From legislation.gov.uk

(1)Apply section 36(2) in accordance with subsections (2) to (5) if the tax against which the credit is to be allowed is income tax on trade income.

(2)Treat the reference to income from any particular source as a reference to trade income arising out of a transaction, arrangement or asset.

(3)C is the income arising out of the transaction, arrangement or asset in connection with which the credit arises.

(4)In calculating an amount of income tax under section 36(2) deduct, from the income arising out of the transaction, arrangement or asset in connection with which the credit arises, deductions which would be allowed in a calculation of the taxpayer's liability in respect of that income.

(5)Treat section 36(3) as referring—

(a)to trade income instead of income, and

(b)to a transaction, arrangement or asset instead of a source.

(6)In subsection (4) “deductions” includes a just and reasonable apportionment of deductions that relate—

(a)partly to the income arising out of the transaction, arrangement or asset in connection with which the credit arises, and

(b)partly to other matters.

(7)In this section “trade income” means income chargeable to tax under—

(a)Chapter 2 or 18 of Part 2 of ITTOIA 2005 (trade profits and post-cessation receipts), or

(b)Chapter 3 or 10 of Part 3 of ITTOIA 2005 (profits of property businesses and post-cessation receipts).

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