Introduction Details of the Section
2.Subsection (1) sets out three conditions that are necessary for the section to apply for an accounting period in the case of a non-UK resident company.
3.Subsections (1)(a) and (1)(b) taken together require that the non-UK resident company must be carrying on a trade in the UK through a permanent establishment in the UK (‘UKPE’), such that Chapter 4 of Part 2 of the Corporation Tax Act 2009 applies to determine its chargeable profits for corporation tax for the accounting period.
4.Subsection (1)(c) sets out the third condition. If certain assumptions are made about the company in relation to sections 80, 106, 107, 108, 109 and 110 then section 80 would apply to UKPE. The first assumption is that UKPE is treated as a distinct and separate enterprise from the non-UK resident company. The second assumption is to treat UKPE as if it were itself a UK resident company under the same control as the non-UK resident company. The third assumption is to treat UKPE as having entered into any transactions that were entered into by the non-UK resident company in so far as the transactions are relevant to UKPE (see subsection (2)).
5.Subsection (2) explains when the transactions mentioned in Subsection (1)(c) are “relevant” to UKPE. The transactions are relevant when they have a bearing on the profits of the non-UK resident company that would be attributable to UKPE in accordance with sections 20 to 32 of CTA 2009.
6.Subsection (3) applies where section 1313(2) of CTA 2009 treats the profits of a non-UK resident company operating on the UK Continental Shelf as if they were profits arising from a trade carried on by that company in the UK through a permanent establishment in the UK. Part 1 applies as if the company actually carried on that trade in the UK through a UK permanent establishment.
7.Subsection (4) imports the definition of ‘control’ from CTA 2010.