C1C2Part 2Double taxation relief
Pt. 2 applied by 2010 c. 4, s. 269DL(6) (as inserted (with effect in accordance with Sch. 3 Pt. 3 of the amending Act) by Finance (No. 2) Act 2015 (c. 33), Sch. 3 para. 1)
C2CHAPTER 2Double taxation relief by way of credit
Limit on credit against corporation tax
44Credit against tax on trade income
1
Apply section 42(2) in accordance with subsections (2) and (3) if the tax against which the credit is to be allowed is corporation tax on income that is trade income.
2
The amount of the credit must not exceed the corporation tax attributable to the income arising out of the transaction, arrangement or asset in connection with which the credit arises.
3
In calculating the amount of corporation tax attributable to any income, take into account—
a
deductions which would be allowed in calculating the company's liability, and
b
expenses of a company connected with the company, so far as reasonably attributable to the income,
but see section 49 (restriction if company is a bank or is connected with a bank).
4
In subsection (3)(a) “deductions” includes a just and reasonable apportionment of deductions that relate—
a
partly to the transaction, arrangement or asset from which the income arises, and
b
partly to other matters.
5
Section 1122 of CTA 2010 (meaning of “connected”) applies for the purposes of subsection (3)(b).
6
In this section “trade income” means—
a
income chargeable to tax under Chapter 2 or 15 of Part 3 of CTA 2009 (trade profits and post-cessation receipts),
b
income chargeable to tax under Chapter 3 or 9 of Part 4 of CTA 2009 (profits of property businesses and post-cessation receipts),
c
income which arises from a source outside the United Kingdom and is chargeable to tax under section 979 of CTA 2009 (charge to tax on income not otherwise charged), and
d
any other income or profits which by a provision of ICTA is or are—
i
chargeable to tax under Chapter 2 of Part 3 of CTA 2009, or
ii
calculated in the same way as the profits of a trade,
but does not include income to which section 99 of this Act (insurance companies) applies.
7
In subsection (6) the references—
a
to income chargeable under Chapter 15 of Part 3 of CTA 2009, and
b
to income chargeable under Chapter 9 of Part 4 of CTA 2009,
do not include income that would, but for the repeal by CTA 2009 of section 103 of ICTA (post-cessation receipts where pre-cessation profits calculated on an earnings basis and other post-cessation receipts that become due or are ascertained after cessation), have been chargeable to corporation tax under that section.
Pt. 2 modified by 1988 c. 1, Sch. 19ABA paras. 26-28 (as inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 34(3) (with Sch. 9 paras. 1-9, 22))