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D4.801A Permanent establishment exemption

Companies can elect for the relevant profits/losses (see D4.802) of a permanent establishment (PE) carried on outside the UK (a foreign permanent establishment) to be left out account when calculating the charge to UK corporation tax¹. This is known as the foreign permanent establishment exemption election, and is sometimes also known as the foreign branch exemption election. The election is generally irrevocable². It is not possible to make this election in relation to profits of a trade of dealing in or developing UK land (see B5.233)³. From 6 April 2019 it is not possible to make the election in relation to gains or losses on disposals of direct or indirect interests in UK land (see C2.1136)⁴. From 6 April 2020, it is also not possible to make the election in relation to the following⁵:

1. Ìý

   •ÌýÌýÌýÌý profits or losses of a non-resident company's UK property business

2. Ìý

   •ÌýÌýÌýÌý profits consisting of a non-resident company's other UK property income, or

3. Ìý

   •ÌýÌýÌýÌý profits or