CTM02130 - Corporation Tax: computation of income: special rules: trades abroad charged under Case V

CTA09/S8, CTA09/S942(1), CTA09/S180(1), CTA09/S1266(1) & CTA09/Sch1 para365(3) (formerly ICTA88/S12 (1), ICTA88/S70 (2), ICTA88/S115 (5))

Where a company is chargeable under Case V of Schedule D in respect of a trade carried on wholly abroad, the income from the trade is computed for CT purposes by using Case I rules. The charge under CT is on the income arising in the accounting period, whether or not remitted to the UK.

Where a trade is carried on abroad by a partnership of which a company resident in the UK is a member, the provisions of CTA09/S1259(3), formerly ICTA88/S114, apply and the taxable profits of that company are computed as if the partnership were a company resident in the UK (see CTM36500 onwards).

Where a trade is carried on wholly or partly in the UK by a partnership of which a company not resident in the UK is a member, the provisions of CTA09/S1259(4), formerly ICTA88/S114, and CTA09/Ss 1261(6) and 1266, formerly ICTA88/S115, apply. The taxable profits of that company are computed as if the partnership were a company not resident in the UK (see CTM36500 onwards).

This means a partner resident abroad will be liable to CT (if a company) or IT (if an individual) on the part of the profits which arises from trading in the UK. You should follow the guidance in IM154, with appropriate adaptations.

For guidance on non-resident companies trading in the UK see CTM34200 onwards.