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HMRC internal manual

International Manual

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HM Revenue & Customs
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International Manual: recent changes

Below are details of the amendments that were published on 13 August 2014 (see the update index for all updates)

Page Details of update
   
INTM281010 For relevant periods starting on or after 1 January 1 January 2013, there is no longer a requirement for the company to be UK resident prior to making an election for S18A to apply.
INTM281020 For relevant accounting periods beginning on or after 1 January 2013 the election can only be revoked by the company which made it, this still has to be prior to the relevant day. Additionally an election made by a UK resident company is revoked upon cessation of UK residency and an election made by a non-UK resident company is revoked, if having become UK resident, the company ceases to be UK resident.
Prior to 1 January 2013 onwards a company that becomes UK resident may arrange to have a short accounting period in which it makes the election for exemption which would then apply to all subsequent accounting periods.    
  INTM282070 For relevant accounting periods beginning on or after 1 January 2013.

CTA09/S18P(3) disapplies the restriction in S18P(2) for close companies when chargeable gains arise from the disposal of assets used solely for the purposes of the trade carried on in the relevant foreign territory through a permanent establishment, or chargeable gains arise from the disposal of currency or debt which was or represented money used for the purposes of such trade. This means such chargeable gains can be included in a relevant profits amount or relevant losses amount for the purposes of CTA/09/S18A for relevant accounting periods beginning on or after 1 January 2013. | | INTM284010 | For relevant accounting periods beginning on or after 1 January 2013.
Lloyd’s underwriters

FA94/Part4/CH5/S227C is inserted to bring the Lloyds rules into line with the main foreign permanent establishment rules.

This section ensures that profits or losses which are the profits or losses of any underwriting year which began before the relevant day (the start date of the foreign permanent establishment exemption) are to be left out of account when calculating the relevant profits or losses amount for the purposes of foreign permanent establishment exemption.

Similarly, profits or losses arising from premium trust fund assets which are allocated to a previous underwriting year which began before the relevant day are also to be left out of account when calculating the relevant profits or losses amount.    
  INTM285050 From 1 January 2013 CAA01/S15(2B) is inserted into CAA01 to ensure that CAA01/S15(2A) does not apply to plant or machinery leases where the company is a lessor if profits or losses arising from the lease are excluded from the relevant profits or losses amount by virtue of CTA09/S18C(3).

S18C(3) applies to leave out of account amounts arising from a lease if the lessor or a connected company has claimed UK capital allowances. It is those amounts that are left out of the exempt relevant profits or losses amount for the foreign permanent establishment. CAA01/S15(2B) overrides the general rule in S15(2A) which states that a business carried on by a foreign permanent establishment covered by an exemption election under CTA09/S18A is considered activity separate from any other activity of the company and that any profits arising are treated as not chargeable to tax.

In cases where leasing profits are excluded from the relevant profits or losses amount of a foreign permanent establishment by virtue of CTA09/S18C(3) this adjustment to CAA01 ensures that those leasing activities can still be qualifying activities for the purposes of the capital allowance rules.    
  INTM286000 INTM286010 has “for relevant periods beginning before 1 January 2013” added to it and INTM286300 onwards is completely new.
  INTM286010 - INTM286110 Has “This applies for relevant periods beginning before 1 January 2013.” added to the top of each page.
For guidance on relevant accounting periods which begin on or after 1 January 2013, please refer to INTM286300 onwards.    
  INTM286300 onwards All of these pages are entirely new and are the guidance for relevant periods beginning on or after 1 January 2013.
  INTM287000 INTM287070 Exclusions: Investment Business has been added.
  INTM287070 This page has been added in totality to give guidance on how Investment business fits in with the new rules.