Section 899 — Income Tax Act 2007: Meaning of “qualifying annual payment”

Meaning of “qualifying annual payment” 899 1 In this Chapter “ qualifying annual payment ” means an annual payment that meets the conditions in subsections (2) to (5).

2 The payment must arise in the United Kingdom.

3 If the recipient is a person other than a company, the payment must be—

a a payment charged to income tax under—

i Chapter 7 of Part 4 of ITTOIA 2005 (purchased life annuity payments),

ii section 579 of that Act (royalties etc from intellectual property), iii Chapter 4 of Part 5 of that Act (certain telecommunication rights: non-trading income), or iv Chapter 7 of Part 5 of that Act (annual payments not otherwise charged), or b a payment charged to income tax under Part 9 of ITEPA 2003 because section 609 or 611 of that Act applies to it (certain employment-related annuities).

4 If the recipient is a company, the payment must be—

a a payment charged to income tax as mentioned in subsection (3)(a), or b a payment which is—

i required to be brought into account under Part 5 of CTA 2009 (loan relationships) as a non-trading credit, or ii from a source in the United Kingdom and chargeable to corporation tax under Chapter 7 of Part 10 of that Act (annual payments not otherwise charged) or regulation 15 of the Unauthorised Unit Trusts (Tax) Regulations 2013 .

5 The payment must not be—

a interest, b a payment which is a qualifying payment for the purposes of Chapter 2 of Part 6 of CTA 2010 (certain payments to charity),

c a payment which is a qualifying donation for the purposes of Chapter 2 of Part 8 (gift aid),

d a payment in relation to which income tax is treated as having been paid under section 494(3) (income tax treated as paid by beneficiary or settlor in relation to discretionary trust),

e a payment which would fall within paragraph (d) but for the fact that the trustees making the payment are non-UK resident, or f an annual payment to which section 904 applies (annual payments for dividends or non-taxable consideration).