Section HM 52 — Income Tax Act 2007: Use of foreign tax credits by zero-rated and certain exiting investors

HM 52 Use of foreign tax credits by zero-rated and certain exiting investors When this section applies (1) This section applies when a multi-rate PIE has a tax credit under subpart LJ (Tax credits for foreign income tax) that is attributable in a tax year to an investor who is— (a) a zero-rated investor: (b) an exiting investor who is treated under section HM 61 as zero-rated. Using tax credit to satisfy income tax liability (2) The investor may use the tax credit under section LS 3 or LS 4 (which relate to the use of tax credits) to satisfy their income tax liability for the tax year. The amount of the credit is determined under subsection (3) or (4). Amount (3) The total amount of the credits able to be used is the lesser of— (a) the total amount of the attributed foreign tax credits for the tax year or exit period, as applicable: (b) the amount calculated by multiplying the attributed PIE income of the investor from the PIE for the tax year or exit period, as applicable by,— (i) for an exiting investor described in subsection (1)(b), the notified investor rate in relation to the investor that the PIE would have used had the period not been an exit period; or (ii) for a zero-rated investor, their basic tax rate set out in schedule 1 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits) for the tax year. Amount for PIEs or proxies (4) Despite subsection (3), the amount of the credit is the attributed amount if the investor is— (a) a multi-rate PIE; or (b) a proxy for an investor in a multi-rate PIE. Defined in this Act: amount , attributed PIE income , attribution period , exit period , foreign tax , income tax liability , investor , multi-rate PIE , notified investor rate , notify , PIE , tax credit , tax year , zero-rated investor Compare: 2007 No 97 s HL 29(7), (8) Section HM 52: inserted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 292(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section HM 52(3)(b): amended, on 1 October 2010, by section 7(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27). Section HM 52(3)(b)(i): amended, on 1 October 2010, by section 7(2) of the Taxation (Budget Measures) Act 2010 (2010 No 27).