Income and Corporation Taxes Act 1988

[F1 231AB No tax credit for original owner under repurchase agreement in respect of certain manufactured dividends. U.K.

(1) A person shall not be entitled to a tax credit under section 231 [F2 above or section 397(1) of ITTOIA 2005] in respect of a qualifying distribution if—

(a) he is the original owner under a repurchase agreement;

(b) the qualifying distribution is a manufactured dividend paid to that person by the interim holder under the repurchase agreement in respect of securities to which the agreement relates; and

(c) the repurchase agreement is not such that the actual dividend which the manufactured dividend represents is receivable otherwise than by the original owner.

[F3 (1A) Where subsection (1) above applies to [F4 a person resident in the United Kingdom] in respect of a qualifying distribution, [F5 section 399(2) of ITTOIA 2005] (certain persons to be treated as having paid income tax at [F6 dividend] ordinary rate on certain distributions etc) shall not apply in relation to that person in respect of that distribution.

F7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(2) For the purposes of this section the cases where there is a repurchase agreement are the following—

(a) any case falling within subsection (1) of section 730A; and

(b) any case which would fall within that subsection if the sale price and the repurchase price were different;

and, in any such case, any reference to the original owner, the interim holder, or the securities to which the agreement relates, shall be construed accordingly.

(3) Subsection (4) of section 231AA applies for the purposes of this section as it applies for the purposes of that section.]

Textual Amendments

F1 S. 231AB inserted (with effect in accordance with s. 102(10) of the amending Act) by Finance Act 1998 (c. 36), s. 102(2)

F2 Words in s. 231AB(1) inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 115(2) (with Sch. 2)

F3 S. 231AB(1A) inserted (with effect in accordance with Sch. 24 para. 1(6) of the amending Act) by Finance Act 2004 (c. 12), Sch. 24 para. 1(2)

F4 Words in s. 231AB(1A) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 115(3)(a) (with Sch. 2)

F5 Words in s. 231AB(1A) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 115(3)(a) (with Sch. 2)

F6 Words in s. 231AB(1A) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 115(3)(a) (with Sch. 2)

F7 Words in s. 231AB(1A) repealed (6.4.2005 with effect in accordance with s. 883(1) of the repealing Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 115(3)(b), Sch. 3 (with Sch. 2)