Finance Act 2009

ICTA

12 (1) Paragraph 4 of Schedule 23A (manufactured overseas dividends) is amended as follows.

(2) For sub-paragraph (1A) substitute—

“(1A) Sub-paragraphs (1C) to (1E) apply where the overseas dividend of which the manufactured overseas dividend is representative is taxable.

(1B) For this purpose an overseas dividend is “taxable” if—

(a) it is received by the overseas dividend manufacturer and the charge to corporation tax on income applies to it, or

(b) it is received by a person other than the overseas dividend manufacturer and the charge to corporation tax on income would have applied to it if it had been received by the overseas dividend manufacturer.

(1C) Where the overseas dividend manufacturer carries on a trade to which the manufactured overseas dividend relates, and neither sub-paragraph (1D) nor (1E) applies, the manufactured overseas dividend is to be treated as an expense of the trade.

(1D) Where the overseas dividend manufacturer has investment business to which the manufactured overseas dividend relates, the manufactured overseas dividend is to be treated as expenses of management of the business for the purposes of Part 16 of CTA 2009.

(1E) Where the overseas dividend manufacturer carries on life assurance business to which the manufactured overseas dividend relates, the manufactured overseas dividend is to be treated as if, to the extent that it is referable to basic life assurance and general annuity business, it were an expense payable falling to be brought into account at step 3 of section 76(7).

(1F) For the purposes of sub-paragraph (1E), the manufactured overseas dividend is to be treated as referable to basic life assurance and general annuity business to the extent that the overseas dividend of which it is representative—

(a) is received by the overseas dividend manufacturer and is so referable by virtue of section 432A, or

(b) is received by a person other than the dividend manufacturer, and would have been so referable by virtue of section 432A if it had it been received by the dividend manufacturer.”

(3) After sub-paragraph (4) insert—

“(4A) In its application in relation to a manufactured overseas dividend by virtue of sub-paragraph (4), Part 9A of CTA 2009 (company distributions) has effect—

(a) as if the manufactured overseas dividend were an overseas dividend on the overseas securities in question, and

(b) subject to the following modification.

(4B) The modification is that—

(a) the definition of “the payer” in section 931T is to be treated as omitted, and

(b) references in that Part to the payer are to be treated as references to the company that pays the dividend of which the manufactured overseas dividend is representative.”