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 ‘QAHC overseas property profits’.

‘QAHC overseas property profits’ 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.