Overseas permanent establishment

This section is designed for the calculation and utilisation of foreign tax, and an overview of the foreign permanent establishment (PE) exemption regime.

The

Overseas PE summary

sheet can be inserted after adding a

Business-trade or property

sheet to the computation. You can insert one

Overseas PE summary

sheet per trade.

The

Overseas PE summary

sheet summarises and calculates taxable profits, allowable losses, utilisation of brought forward and brought back restricted trading losses (losses that can only be used against profits of the same trade), and creditable foreign tax. The sheet also presents any elections and other options you select.

In this sheet, you can manually enter data or you can insert the

Overseas permanent establishment

sheet. Any UK tax on taxable profits comes from the

Double tax relief

sheet, which must be inserted separately. This sheet creates individual permanent establishments (whether inserted directly on the sheet or inserted from the individual PE sheet) that will automatically insert rows on the

Double tax relief

sheet. The UK tax on taxable profits after all reliefs goes back to the

Other permanent establishment

sheet in the Creditable foreign tax row. Also, foreign tax deducted against UK trade income, any s.35 deduction deducted against UK trade income and any exempt profits/losses as a result of the foreign PE exemption will go to the

Adjustment of profit

sheet under Adjusted profit (+) / loss (-) before accounting period adjustments.

The

Overseas permanent establishment

sheet lets you have separate sheets for each individual PE. This sheet tracks unrelieved foreign tax and calculates taxable trading profits starting from the income statement profit before tax. Also, the sheet calculates available foreign tax and shows the usage of it. This sheet can be inserted from the

Overseas PE summary

sheet. This sheet will be named after the user enters the name of the PE in the first row of the sheet.

In this sheet you can adjust the profit or loss before tax and input data on foreign tax. Creditable foreign tax comes from the

Overseas PE summary

, whereas exempt amounts come from both the

Overseas PE summary

sheet and the

Overseas PE losses

sheet.

The

Overseas PE losses

sheet is designed to track trading losses attributable to each PE and consequently the UK trade as a balancing figure. If the foreign branch exemption applies, the sheet tracks negative amounts for each PE and the residual amount. The sheet is automatically added when the

Overseas PE summary

sheet is developed.

On the

Overseas PE losses

sheet, you can enter brought forward losses and any negative amounts. Net relevant profits come from the

Overseas PE summary

sheet. This sheet shows losses carried forward and amounts of profits or losses exempt in the period.

On the

Overseas PE losses sheet

, you can enter a brought forward loss and any negative amounts. Net relevant profits come from

Overseas PE summary

. This sheet shows losses carried forward and amounts of profits/losses exempt in the period.

Sheets involved:

The purpose of these sheets is to analyse the different types of capital allowances being claimed between the PEs and the residual UK trade. The

Main pool – Overseas PE analysis

,

Special rate pool – Overseas PE analysis

and

Other allowances – Overseas PE analysis sheets

can be inserted after adding an

Overseas PE summary

sheet to the computation. The

Other allowances – Overseas PE analysis

sheet will be named after you enter the description of the allowance in the first row of the sheet. These sheets allow you to analyse capital allowances and balancing charges of every individual PE for which the foreign PE exemption does not apply. Each inserted PE will have its own column on the sheets. Additional blocks are automatically inserted for each accounting period in your calculation which lets you analyse the correct amount to the respective period.

Sheets involved:

The purpose of these sheets is calculate the notional capital allowances and balancing charges applicable to each PE for which the foreign PE exemption applies.

To insert the

Notional main pool

,

Notional special rate pool

and

Other notional allowances

sheets add an

Overseas PE summary

sheet to the computation and select

Yes

in the

Foreign PE exemption

checkbox on the

Permanent information

sheet. The

Other notional allowances

sheet will be named after you enter the description of the allowance in the first row of the sheet. These sheets allow you to analyse capital allowances and balancing charges of every individual PE. Each inserted PE will have its own column on the sheets. Additional blocks are automatically inserted for each accounting period in your calculation which lets you analyse the correct amount to the respective period.