Section 779 — Corporation Tax Act 2010: Tax charged on income transferred

Tax charged on income transferred 779 1 This section applies if—

a under a loan or credit transaction a company transfers income arising from property, b the company is not, as a result of Chapter 2 (finance arrangements), chargeable to corporation tax on the income transferred, and c the company is within the charge to corporation tax.

2 In such a case, the company which transfers the income is charged to corporation tax, under the charge to corporation tax on income, on an amount equal to the income transferred.

3 This section does not prejudice the liability of any other person to tax.

4 For the purposes of this section a company transfers income if it surrenders, waives or forgoes it.

5 Subsection (6) applies for the purposes of this section if—

a credit is given for the purchase price of property, and b the rights attaching to the property are such that the buyer's rights to income from the property are suspended or restricted during the life of the debt.

6 The buyer must be treated as surrendering income of an amount equal to the income the buyer in effect forgoes by obtaining the credit.

7 For the purposes of this section an amount of income payable subject to deduction of income tax must be taken as the amount before deduction of tax.