Corporation Tax Act 2010 section 54

Non-UK resident company: receipts of interest, dividends or royalties

Section 54 prevents a non-UK resident company trading in the UK from artificially creating trade losses by stripping out tax-exempt interest, dividends or royalties from its profit calculations.

• Applies to non-UK resident companies that carry on a trade in the United Kingdom and receive tax-exempt interest, dividends or royalties
• Tax-exempt receipts must remain included in the company's trading profits and cannot be excluded to manufacture a loss
• Any losses that do arise may still be relieved, provided they are calculated with the tax-exempt receipts included in profits
• A receipt is "tax-exempt" if it is treated as exempt under a double taxation agreement given effect by section 2 of TIOPA 2010