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A4.441 Deduction of tax from intellectual property royalties etc where the usual place of abode of the owner is abroad

ITA 2007, s 906 imposes a duty to deduct a sum representing income tax at the basic rate for the tax year of payment from:

1. Ìý

   •ÌýÌýÌýÌý a payment of royalties, or payment of any other kind, for the use of (or right to use) intellectual property where the owner's usual place of abode is outside the UK, and

2. Ìý

   •ÌýÌýÌýÌý a periodical payment in respect of intellectual property where the person who is entitled to that payment has assigned the right and the usual place of abode of the assignor is outside the UK

In either case, the duty to deduct tax applies only where the payment is charged to income tax or corporation tax¹.

The duty to deduct tax extends to payments on account of a payment within either of the above categories². It cannot