Law

Income Tax Act 2007

United Kingdom · statute

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In force since 2026-09-16, as the publisher states.

Copy read on 2026-11-08. The page it was read from

Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.

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Contents: 1,664 provisions

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1,664 provisions

914 European Union

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915 Power to make directions disapplying section 914

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916 Duty of payee to notify if payment not exempt

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917 Supplementary

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917A Tax avoidance arrangements

(1) This section applies if and to the extent that— (a) a person (“the payer”) makes an intellectual property royalty payment, (b) the payment is received by a person (“the payee”) who is connected with the payer, and (c) the payment is made under DTA tax avoidance arrangements. (2) Any duty under Chapter 6 or 7 to deduct a sum representing income tax at any rate applies without regard to any double taxation arrangements. (3) Any income tax deducted by virtue of subsection (2) may not be set off under section 967 or 968 of CTA 2010. (4) In this section— “arrangements” (except in the phrase “double taxation arrangements”) includes any agreement, understanding, scheme, transaction or series of transactions, whether or not legally enforceable; “DTA tax avoidance arrangements” means arrangements where, having regard to all the circumstances, it is reasonable to conclude that— the main purpose, or one of the main purposes, of the arrangements was to obtain a tax advantage by virtue of any provisions of a double taxation arrangement, and obtaining that tax advantage is contrary to the object and purpose of those provisions; “intellectual property royalty payment” means a payment referred to in section 906(2)(a) or (3)(a); “receive” means receive— directly or indirectly; by one payment or by a series of payments; “tax advantage” is to be construed in accordance with section 208 of FA 2013. (5) For the purposes of this section the payer is connected with the payee if the participation condition is met as between them. (6) Section 148 of TIOPA 2010 (when the participation condition is met) applies for the purposes of subsection (5) as for the purposes of section 147(1)(b) of that Act, but as if references to the actual provision were to the provision made or imposed between the payer and the payee in respect of the arrangements under which the payment is made.

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918 Manufactured dividends on UK shares: Real Estate Investment Trusts

(1) This section applies if— (a) a person pays a manufactured payment as mentioned in section 614ZC(1) and the amount payable is representative of a dividend (a “manufactured dividend”), and (b) the manufactured dividend is representative of a dividend which is— (i) paid by a company UK REIT in respect of profits or gains (or both) of the company's property rental business, or (ii) paid by the principal company of a group UK REIT in respect of profits or gains (or both) of property rental business of members of the group. (2) This section applies only so far as the manufactured dividend is representative of such a dividend. (3) If the payer— (a) is UK resident, or (b) pays the manufactured dividend in the course of a trade carried on through a branch or agency in the United Kingdom, regulations under section 973 apply to the payer as they apply to a company UK REIT, with any necessary modifications. (3A) But subsection (3) does not apply if— (a) the manufactured dividend is paid by a UK resident company in the course of a trade carried on through a permanent establishment in a territory outside the United Kingdom, and (b) section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is paid. (4) The Treasury may by regulations provide, in a case where the payer— (a) is non-UK resident and pays the manufactured dividend otherwise than in the course of a trade carried on through a branch or agency in the United Kingdom, or (b) is a UK resident company and pays the manufactured dividend in the course of a trade carried on through a permanent establishment in a territory outside the United Kingdom and section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is paid, for a United Kingdom recipient of the manufactured dividend to be liable to account for and pay income tax in respect of it. (5) A United Kingdom recipient is a recipient who— (a) is UK resident, or (b) is non-UK resident but receives the manufactured dividend for the purposes of a trade carried on by the recipient through a branch or agency in the United Kingdom. (5A) But a UK resident is not a United Kingdom recipient if— (a) it is a UK resident company which receives the manufactured dividend for the purposes of a trade carried on by the recipient through a permanent establishment in a territory outside the United Kingdom, and (b) section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is received. (6) The amount of income tax which the recipient may be liable to account for and pay under regulations under subsection (4) is equal to the amount of the sum representing income tax which the payer would have been required to deduct in accordance with regulations under section 973. (7) For the purposes of— (a) regulations under section 973 as applied by subsection (3), and (b) regulations under subsection (4), the “gross amount” of a manufactured dividend to which this section applies is equal to the gross amount of the dividend of which it is representative. (8) In subsection (1) “gains” includes chargeable gains.

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919 Manufactured interest on UK securities: payments by UK residents etc

(1) This section applies if— (a) a person pays a manufactured payment as mentioned in section 614ZC(1), (b) the amount payable is representative of interest on UK securities (“manufactured interest”), and (c) the person — (i) is UK resident, or (ii) pays the manufactured interest in the course of a trade carried on in the United Kingdom through a branch or agency. (1A) But this section does not apply if— (a) the manufactured interest is paid by a UK resident company in the course of a trade carried on through a permanent establishment in a territory outside the United Kingdom, and (b) section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is paid. (2) The payer of the manufactured interest must, on making the payment, deduct from the gross amount of the manufactured interest a sum representing income tax on it at the savings basic rate in force for the tax year in which the payment is made. (3) The “gross amount” of manufactured interest is equal to the gross amount of the interest of which it is representative. (4) This section is subject (in particular) to— ... ... section 921 (cases where interest on underlying securities paid gross), and Chapter 11 (payments between companies etc: exception from duties to deduct). (5) 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 payer of the manufactured interest is a company, and (b) otherwise see Chapter 16. (6) In subsection (1) “UK securities” means securities of— (a) the government of the United Kingdom, (b) a local authority in the United Kingdom, (c) another public authority in the United Kingdom, or (d) a UK resident company or other UK resident body. (7) But “UK securities” does not include shares in a UK resident company. (8) In this section “securities” includes loan stock or any similar security.

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920 Foreign payers of manufactured interest: the reverse charge

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921 Cases where interest on underlying securities paid gross

(1) This section applies to manufactured interest which is representative of interest on— (a) gilt-edged securities, or (b) securities which are not gilt-edged securities but on which the interest is payable without deduction of income tax. (2) Section 919(2) does not require any deduction of a sum representing income tax to be made on the payment of the manufactured interest. (3) In this section “manufactured interest” has the same meaning as in section 919.

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922 Manufactured overseas dividends: payments by UK residents etc

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923 Foreign payers of manufactured overseas dividends: the reverse charge

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924 Power to reduce section 923 liability

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925 Power to provide set-off entitlement

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925A Creditor repos

(1) Subsection (2) applies if a company (“the lender”) has a creditor repo for the purposes of Chapter 10 of Part 6 of CTA 2009 (see section 543 of that Act). (2) Sections 918 , 919 and 921 have effect in relation to the lender while the arrangement is in force as if— (a) the lender paid the borrower amounts which are representative of the income payable on the securities that are initially sold, (b) the payments were made under requirements of the arrangement, and (c) the payments were made on the dates on which the income is payable. (3) For the purposes of subsection (2), an arrangement is in force from the time when the securities are initially sold until the earlier of— (a) the time when the subsequent sale of the securities, or similar securities, takes place, and (b) the time when it becomes apparent that that sale will not take place.

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925B Debtor repos

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925C Actual payments ignored if section 925A ... applies

If section 925A(2) ... applies, any payment actually made under an arrangement which is representative of any income payable on any securities is to be treated for the purposes of sections 918 , 919 and 921 as if it had not been made.

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925D Power to modify repo sections

(1) The Treasury may by regulations provide for all or any of the provisions of sections 925A to 925F to apply with modifications in relation to— (a) cases to which section 925E (non-standard repo cases) applies, or (b) cases involving redemption arrangements, or (c) both of those cases. (2) A case involves redemption arrangements if— (a) arrangements, corresponding to those made in cases where a company has a repo, are made in relation to securities that are to be redeemed in the period after their sale, and (b) the arrangements are such that a person (instead of having the right or obligation to buy those securities, or similar or other securities, at any subsequent time) has a right or obligation in respect of the benefits which will result from the redemption. (3) The regulations may make incidental, supplemental, consequential and transitional provision and savings. (4) In this section “modifications” includes exceptions and omissions. (5) For the purposes of subsection (2)(a) and section 925E(1), a company has a repo if— (a) for the purposes of Chapter 10 of Part 6 of CTA 2009— (i) it has a creditor repo (see section 543 of that Act), (ii) it has a creditor quasi-repo (see section 544 of that Act), (iii) it has a debtor repo (see section 548 of that Act), or (iv) it has a debtor quasi-repo (see section 549 of that Act), or (b) as a result of section 547 of that Act, the company has a creditor repo for the purposes of section 546 of that Act.

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925E Cases where section 925D applies: non-standard repos

(1) This section applies to a case if— (a) a company has a repo, (b) there has been a sale of the securities under the arrangement or arrangements by reference to which the company has the repo, and (c) any of conditions A to C is met. (2) Condition A is that those securities, or similar or other securities, are not subsequently bought under the arrangement or arrangements. (3) Condition B is that provision is made by or under an arrangement for different or additional securities to be treated as, or as included with, securities which, for the purposes of the subsequent purchase, are to represent those initially sold. (4) Condition C is that provision is made by or under an arrangement for securities to be treated as not so included. (5) Section 925D(5) interprets references in subsection (1) to a company having a repo.

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925F Interpretation of the repo sections

(1) This section applies for the purposes of sections 925A to 925E and this section. (2) “Arrangement” includes any agreement or understanding (whether or not legally enforceable). (3) It does not matter whether or not provision of any arrangement conferring a right or imposing an obligation on any person to buy any securities is subject to any conditions. (4) “Securities” means shares, stock or other securities issued by— (a) the government of the United Kingdom, (b) any public or local authority in the United Kingdom, (c) any UK resident company or other UK resident body, (d) a government or public or local authority of a territory outside the United Kingdom, or (e) any other body of persons not resident in the United Kingdom. (5) Securities are similar if they give their holders— (a) the same rights against the same persons as to capital, interest and dividends, and (b) the same remedies to enforce those rights. (6) Subsection (5) applies even if there is a difference in— (a) the total nominal amounts of the securities, (b) the form in which they are held, or (c) the manner in which they can be transferred. (7) If— (a) a person (“A”) buys securities (or has a right or obligation to buy securities), but (b) the securities are (or are to be) held for the benefit of another person (“B”), B (not A) is treated as buying (or having the right or obligation to buy) the securities. (8) If— (a) a person (“C”) sells securities, but (b) the proceeds of the sale are held for the benefit of another person (“D”), D (not C) is treated as selling the securities.

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926 Interpretation of Chapter

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) References in this Chapter to a trade carried on through a branch or agency are to be read, in relation to a company, as references to a trade carried on through a permanent establishment.

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927 Regulation-making powers: general

Regulations under this Chapter may make different provision for different cases.

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928 Chargeable payments connected with exempt distributions

(1) This section applies to any payment chargeable to tax under section 1086 of CTA 2010 (chargeable payments made within 5 years of an exempt distribution). (2) The person by or through whom the payment is made must, on making the payment, deduct from it a sum representing income tax on it at the basic rate in force for the tax year in which it is made. (3) See Chapter 11 (payments between companies etc) for an exception from the duty to deduct sums representing income tax under this section. (4) 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. (5) In this section “payment” does not include a transfer of money's worth that is treated as a payment for the purposes of sections 1086 to 1090 of CTA 2010 (see section 1086(6) of that Act).

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929 Overview of Chapter

(1) This Chapter makes provision allowing some payments made by companies, local authorities and qualifying partnerships to be paid gross where they would otherwise be subject to specified duties to deduct sums representing income tax under this Part. (2) Section 930 disapplies specified duties to deduct where a payment is made by a company, local authority or qualifying partnership which reasonably believes that the payment is an excepted payment. (3) Section 931 confers power on an officer of Revenue and Customs to disapply section 930 by direction. (4) Section 932 defines “qualifying partnership”. (5) Sections 933 to 937 make provision as to when a payment is an excepted payment. (6) Section 938 deals with what happens when a company, local authority or qualifying partnership makes a payment without deducting a sum representing income tax under a reasonable but incorrect belief that the payment is an excepted payment.

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930 Exception from duties to deduct sums representing income tax

(1) The duties to deduct sums representing income tax mentioned in subsection (2) do not apply to a payment if— (a) it is made by a company, local authority or qualifying partnership, and (b) at the time the payment is made, the company, authority or partnership reasonably believes that it is an excepted payment. (2) The duties to deduct are those under— (a) section 874(2) (certain payments of yearly interest), (b) section 889(4) (payments in respect of building society securities), (c) section 901(4) (annual payments made by persons other than individuals), (d) section 903(7) (patent royalties), (e) section 906(5) (certain royalty payments etc where the owner lives abroad), (f) section 910(2) (proceeds of a sale of patent rights paid to non-UK residents), (g) section 919(2) (manufactured interest on UK securities: payments by UK residents etc), and (h) section 928(2) (chargeable payments connected with exempt distributions). (3) Subsection (1) has effect subject to any directions under section 931. (4) Subsection (1) does not apply to a payment made by a company, or qualifying partnership, acting as trustee or agent for another person.

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931 Power to make directions disapplying section 930

(1) An officer of Revenue and Customs may give a direction to a company, local authority or qualifying partnership directing that section 930 is not to apply in relation to any payment that— (a) is made by the company, authority or partnership after the giving of the direction, and (b) is specified in the direction or is of a description so specified. (2) A direction under this section may be given only if the officer has reasonable grounds for believing, as respects each payment to which the direction relates, that the payment will not be an excepted payment at the time it is made. (3) A direction under this section may be varied or revoked by a later direction. (4) A variation or revocation of a direction under this section has effect only in relation to payments made after the date of the variation or revocation.

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932 Meaning of “qualifying partnership”

For the purposes of this Chapter a partnership is a “qualifying partnership” if any partner in the partnership is a company or a local authority.

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933 UK resident companies

A payment is an excepted payment if the person beneficially entitled to the income in respect of which the payment is made is a UK resident company.

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934 Non-UK resident companies

(1) A payment is an excepted payment if each of the following conditions is met in relation to the payment. (2) The person beneficially entitled to the income in respect of which the payment is made must be a non-UK resident company. (3) The non-UK resident company must carry on a trade in the United Kingdom through a permanent establishment. (4) The payment must be one that is required to be brought into account in calculating the chargeable profits (within the meaning given by section 19 of CTA 2009) of the non-UK resident company.

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935 PEP and ISA managers

(1) A payment is an excepted payment if each of the following conditions is met in relation to the payment. (2) The person to whom the payment is made must be, or must be the nominee of, the plan manager of a plan of a kind to which regulations under Chapter 3 of Part 6 of ITTOIA 2005 (income from individual investment plans) apply. (3) The plan manager must receive the payment in respect of investments under the plan.

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936 Recipients who are to be paid gross

(1) A payment is an excepted payment if it is made to, or to the nominee of, a recipient who is specified in subsection (2) as a recipient who is to be paid gross. (2) The following recipients are to be paid gross— (a) a local authority, (b) a health service body within the meaning of section 986 of CTA 2010, (c) a public office or department of the Crown other than one mentioned in section 978(2), (d) a charity, (e) a body for the time being mentioned in section 468 of CTA 2010 (bodies that are allowed the same exemption from tax as charitable companies the whole income of which is applied to charitable purposes), (f) a body which is an association for the purposes of section 469(1)(a) of CTA 2010 (scientific research associations) and complies with the conditions in subsections (2) and (3) of that section, (g) the scheme administrator of a registered pension scheme, (h) the sub-scheme administrator of a sub-scheme which forms part of a split scheme pursuant to the Registered Pensions (Splitting of Schemes) Regulations 2006 (S.I. 2006/569), (i) the trustees of a scheme entitled to exemption under section 613(4) of ICTA (Parliamentary pension funds), and (j) the persons entitled to receive the income of a fund entitled to exemption under section 614(3) of ICTA (certain colonial, etc pension funds). (3) The Treasury may by order amend this section so as to add to, restrict or otherwise alter the persons or bodies who are to be paid gross.

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937 Partnerships

(1) A payment is an excepted payment if each of the following conditions are met. (2) A partnership must be beneficially entitled to the income in respect of which the payment is made. (3) Each partner in the partnership must be— (a) a person or body mentioned in section 936, or (b) a person or body to whom one of subsections (4) to (6) applies. (4) This subsection applies to a UK resident company. (5) This subsection applies to a company that— (a) is non-UK resident, (b) carries on a trade in the United Kingdom through a permanent establishment, and (c) is required to bring into account, in calculating its chargeable profits (within the meaning of section 19 of CTA 2009), the whole of any share of the payment that is attributable to it because of Part 17 of that Act. (6) This subsection applies to the European Investment Fund. (7) The Treasury may by order amend this section to add to, restrict or otherwise alter the persons or bodies falling within subsection (3)(b).

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938 Consequences of reasonable but incorrect belief

(1) This section applies if— (a) a payment is made by a company, local authority or qualifying partnership without a sum representing income tax on the payment being deducted from it, (b) at the time the payment is made, the company, authority or partnership reasonably believes that it is an excepted payment, (c) one of the duties to deduct sums representing income tax mentioned in section 930(2) would apply to the payment if the company did not so believe, and (d) the payment is not an excepted payment at the time it is made. (2) This Part has effect in relation to the payment as if section 930(1) had never disapplied the duties to deduct mentioned in section 930(2).

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939 Duty to retain bonds where issue treated as payment of interest

(1) This section applies if— (a) there is an issue of funding bonds to a creditor in respect of a liability to pay interest on a debt incurred by a government, public institution, other public authority or body corporate, (b) by virtue of section 413 of CTA 2009 or section 380 of ITTOIA 2005, the issue is treated as if it were a payment of an amount of interest (“the deemed interest”), and (c) the person by or through whom the bonds are issued is required, under this Part, to deduct a sum representing income tax from the deemed interest. (2) The person by or through whom the bonds are issued must retain bonds the value of which is, at the time of their issue, equal to income tax on the deemed interest at the savings basic rate in force for the tax year in which the bonds are issued. (3) A person who retains bonds in accordance with subsection (2) is treated as complying with the duty to deduct a sum representing income tax from the deemed interest. (4) The person may tender the bonds retained in satisfaction of any income tax to be collected from the person in respect of the deemed interest under Chapter 15 or 16. (4A) If bonds are tendered in accordance with subsection (4), the Commissioners for Her Majesty's Revenue and Customs may tender the bonds in satisfaction of any amount that is payable by the Commissioners to the relevant creditor in connection with the relevant debt. (4B) For the purposes of subsection (4A)— (a) “relevant creditor” and “relevant debt” mean the creditor and the debt mentioned in subsection (1)(a), and (b) a bond is to be taken to have the same value that it had at the time of its issue. (4C) If bonds that are to be tendered in accordance with subsection (4) or (4A) are subject to restrictions on their tender or transfer, the restrictions do not prevent the bonds from being— (a) tendered in accordance with that subsection, or (b) transferred from the person tendering them to the person to whom they are tendered. (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) In this Chapter “funding bonds” includes any bonds, stocks, shares, securities or certificates of indebtedness (but does not include any instrument providing for payment in the form of goods or services or a voucher).

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940 Exception from duty to retain bonds

(1) This section applies if an issue of funding bonds is treated as a payment of interest (“the deemed interest”) as mentioned in section 939(1) and— (a) the person by or through whom the bonds are issued is required to retain bonds under section 939(2), but (b) it is impracticable for the person to do so. (2) The duty to deduct a sum representing income tax from the deemed interest under this Part does not apply if the person tells the Commissioners for Her Majesty's Revenue and Customs— (a) the names and addresses of the persons to whom the bonds have been issued, and (b) the amount of the bonds issued to each person. (3) Accordingly— (a) the duty to retain bonds under section 939(2) does not apply, and (b) the provisions in Chapters 15 and 16 about the collection of income tax in respect of the deemed interest do not apply.

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940A No appropriate bond or combination of bonds

(1) This section applies if— (a) the Commissioners for Her Majesty's Revenue and Customs hold one or more bonds tendered in accordance with section 939(4), (b) the Commissioners wish to tender bonds in accordance with section 939(4A) in satisfaction of an amount payable to the relevant creditor, and (c) the Commissioners consider that they do not hold a bond, or combination of bonds, that is appropriate for satisfying the amount payable. (2) If requested to do so by the Commissioners, the bond issuer must secure that the Commissioners hold a bond, or combination of bonds, that the Commissioners consider to be appropriate for satisfying the amount payable. (3) If requested to do so by the bond issuer, a person must assist the bond issuer to comply with subsection (2). (4) The duty under subsection (2), or under subsection (3), does not apply if it would be impracticable for the bond issuer, or the other person, to comply with the duty. (5) The matters which the Commissioners may take into account when considering whether or not a bond or combination of bonds is appropriate for satisfying the amount payable include— (a) the value of a bond at the time of its issue, (b) the interest which the relevant creditor, or any other person, has in a bond (including the nature or size of the interest), and (c) the terms on which a bond is issued. (6) For the purposes of this section— (a) “bond issuer” means the person by or through whom bonds were issued, and (b) “relevant creditor” and “relevant debt” have the same meanings as in section 939(4A).

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941 Deemed payments to unit holders and deemed deductions of income tax

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942 Income tax to be collected from trustees

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943 Calculation of trustees' income pool

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... Treatment of cases involving double tax relief

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943B The “foreign element” of a deemed deduction or deemed income

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