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HMRC internal manual

International Manual

Foreign Permanent Establishments of UK Companies: introduction: exempt profits or losses: profits attributable to PEs for purposes of TIOPA10

Effect of TIOPA10/S42(2)

Before it was amended by FA 2011, TIOPA10/S43 applied the permanent establishment (PE) provisions of CTA09/Chapter 4/Part 2 (previously ICTA88/S11AA) in determining for the purposes of TIOPA10/S42(2) how much of a UK resident company’s chargeable profits was attributable to an overseas PE of the company.

TIOPA10/S43, as amended by FA 2011, introduces specific rules for the PEs of UK resident companies, particularly in relation to the attribution of capital. Although this change was introduced alongside branch exemption, it applies to all overseas PEs of UK resident companies whether or not the company has made an election under CTA09/S18A. See INTM268000 onwards.