Part 2Double taxation relief

CHAPTER 2Double taxation relief by way of credit

Limit on, and reduction of, credit against income tax

38Credit against tax on royalties: further rules

(1)Subsection (2) applies if—

(a)the arrangements are double taxation arrangements, and

(b)royalties, as defined in the arrangements, are paid in respect of an asset in more than one foreign jurisdiction.

(2)For the purposes of section 36(2)—

(a)royalty income arising in more than one foreign jurisdiction in a tax year in respect of the asset is to be treated as a single item of income, and

(b)credits available for foreign tax in respect of the royalty income are to be aggregated accordingly.

(3)In this section “foreign jurisdiction” means a jurisdiction outside the United Kingdom.