Commentary on Sections Overview Overview Section 28: Unilateral relief for Isle of Man or Channel Islands tax
100.This section is an exception to the rule that relief under section 18(2) is restricted to UK residents. It is based on sections 792(1), 794(2) and 831(5) of ICTA and section 277(1) of TCGA.
101.Section 18(3) makes it clear that section 18(2) only gives credit for tax paid under the law of the territory to which the arrangements relate. Accordingly, the credit mentioned in subsection (1) has to be credit for Manx tax within section 9 in relation to the Isle of Man, and the credit mentioned in subsection (3) has to be credit for tax payable under the law of the Channel island or islands concerned and within section 9 in relation to that island or those islands.
102.In section 794(2) of ICTA, “the person in question” harks back to “the person in respect of whose income or chargeable gains the United Kingdom tax is chargeable” in section 794(1), in relation to income tax and corporation tax. On a literal interpretation, section 277(1) of TCGA could be taken as requiring subsections (1) and (2) to refer to “capital” gains in relation to capital gains tax. But, if capital gains tax is chargeable in respect of gains, the gains are “chargeable” gains. Subsections (1) and (2) therefore refer to “chargeable” gains, in relation both to corporation tax and to capital gains tax.