IFM40810 - Overseas property business: overseas property income

FA22/SCH2/PARA52

Where a qualifying holding company (QAHC) chooses to invest in overseas property, the profits arising from such an investment will be 鈥楺AHC overseas property profits鈥�.

鈥楺AHC overseas property profits鈥� are defined by PARA 52(2) as those which would otherwise be chargeable under CTA09/PT4/CH3 (profits of a property business) as profits of an overseas property business of a QAHC.

These QAHC overseas property profits are exempt from corporation tax in the UK but only where those profits are taxable in a foreign jurisdiction.

PARA 52(3) provides that profits are taxable in a foreign jurisdiction if they are chargeable to tax in the foreign jurisdiction (that is, not exempt, nor chargeable at a nil rate) and:

  • the tax is charged on income and corresponds to UK income tax; or
  • the tax is charged on income and corresponds to UK corporation tax on income.