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HMRC internal manual

Double Taxation Relief Manual

HM Revenue & Customs
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Non-residents: UK income: Non-trading income

ICTA88/S11 (2) also gives a Corporation Tax charge on non-trading income - income from property or rights used by, or held by or for, the branch or agency. These words would apply, for example, to interest, patent royalties and other pure income and there is a special exclusion for distributions from United Kingdom companies. For example there can be the case where the trading branch or agency has put some of its money into a foreign bank account. That is a Case V source and as a matter of first principle a non-resident cannot be taxed on overseas income because it is not within ICTA88/S18. However, when Corporation Tax was introduced in 1965, such income was brought specifically into its charge under the provisions of ICTA88/S70 (3).