CTM01170 - Corporation Tax: introduction: IT deducted from income received

ICTA88/S6 (2), ICTA88/S7 (2)

A company may suffer IT by deduction on annual interest, royalties and other annual payments it receives. Such interest, etc, is income, and the gross amount forms part of the total profits on which the company is chargeable to CT. The income is not within the charge to IT and so the company is entitled to repayment of the balance remaining of any IT suffered after it has been set-off under ICTA88/S7 (2) against any tax assessable on the company.

However the tax deducted from income received by a company may be set against the tax deductible under ICTA88/S349 from payments of annual interest, etc, made by a company. ICTA88/SCH16 makes provision for this.