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Unilateral relief (leasing income).
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52.— (1) The Principal Act is amended in Schedule 24—
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(a) in paragraph 4(5)(a) by substituting “paragraphs 9D, 9DB and 9DC” for “paragraphs 9D and 9DB”,
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(b) in paragraph 4(5)(b) by deleting “and” where it last occurs in subclause (iv), by inserting “and” after “that paragraph),” in subclause (v) and by inserting the following after subclause (v):
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“(vi) the amount of income of a company treated for the purposes of paragraph 9DC as referable to an amount of relevant leasing income (within the meaning of that paragraph),”,
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and
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(c) by inserting the following after paragraph 9DB:
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“Unilateral Relief (leasing income)
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9DC. (1) (a) In this paragraph—
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‘leasing income’ means payments of any kind as consideration for the use of, or the right to use, industrial, commercial or scientific equipment;
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‘relevant foreign tax’, in relation to leasing income receivable by a company, means tax—
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(i) which under the laws of any foreign territory has been deducted from the amount of the lease payment,
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(ii) which corresponds to income tax or corporation tax,
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(iii) which has not been repaid to the company,
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(iv) for which credit is not allowable under arrangements, and
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(v) which, apart from this paragraph, is not treated under this Schedule as reducing the amount of income;
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‘relevant leasing income’ means leasing income receivable by a company—
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(i) which falls to be taken into account in computing the trading income of a trade carried on by the company, and
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(ii) from which relevant foreign tax is deducted.
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(b) For the purposes of this paragraph—
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(i) the amount of corporation tax which apart from this paragraph would be payable by a company for an accounting period and which is attributable to an amount of relevant leasing income shall be an amount equal to 12.5 per cent of the amount by which the amount of the income of the company referable to the amount of the relevant leasing income exceeds the relevant foreign tax, and
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(ii) the amount of any income of a company referable to an amount of relevant leasing income in an accounting period shall, subject to paragraph 4(5), be taken to be such sum as bears to the total amount of the trading income of the company for the accounting period before deducting any relevant foreign tax the same proportion as the amount of relevant leasing income in the accounting period bears to the total amount receivable by the company in the course of the trade in the accounting period.
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(2) Where, as respects an accounting period of a company, the trading income of a trade carried on by the company includes an amount of relevant leasing income, the amount of corporation tax which, apart from this paragraph, would be payable by the company for the accounting period shall be reduced by so much of 87.5 per cent of any relevant foreign tax borne by the company in respect of relevant leasing income in that period as does not exceed the corporation tax which would be so payable and which is attributable to the amount of the relevant leasing income.”.
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(2) This section applies in respect of leasing income (within the meaning of paragraph 9DC(1)(a) (inserted by subsection (1)) of Schedule 24 to the Principal Act) received on or after 1 January 2012.
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