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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 reduced by reference to accrued income losses

Section 39 | Credit reduced by reference to accrued income losses

From legislation.gov.uk

(1)Subsection (5) applies if each of conditions A to C is met.

(2)Condition A is that a person is entitled under section 18(2) to credit against income tax.

(3)Condition B is that the income tax is calculated by reference to income consisting of interest in respect of which the person is entitled under section 679 of ITA 2007 (no income tax on interest so far as matched by accrued income losses) to an exemption from liability to income tax.

(4)Condition C is that—

(a)the arrangements are unilateral relief arrangements for a territory outside the United Kingdom and the credit is allowed as a result of section 9, or

(b)the arrangements are double taxation arrangements and the credit is allowed as a result of the inclusion in the arrangements of any provision corresponding to that section.

(5)The amount of the credit is to be reduced to the amount given by—

Formula

I—EI×C

where—

I is the amount of the interest,

E is the amount of the exemption, and

C is the amount the credit would be apart from this subsection.

(6)Expressions used in this section and in Chapter 2 of Part 12 of ITA 2007 (accrued income profits) have the same meaning in this section as in that Chapter.

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