Income and Corporation Taxes Act 1988

730 [F1 Transfers of rights to receive distributions in respect of shares] U.K.

M1 (1) Where in any chargeable period the owner of any [F2 shares] (“the owner”) sells or transfers the right to receive any [F3 distribution] payable (whether before or after the sale or transfer) in respect of the [F2 shares] without selling or transferring the [F2 shares], then, for all the purposes of the Tax Acts, that [F3 distribution], whether it would or would not be chargeable to tax apart from the provisions of this section—

(a) shall be [F4 treated as] the income of the owner or, in a case where the owner is not the beneficial owner of the [F2 shares] and some other person (“a beneficiary”) is beneficially entitled to the income arising from the [F2 shares], the income of the beneficiary, and

(b) shall be [F5 treated as] the income of the owner or beneficiary for that chargeable period, F6 . . .

(c) F6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F7 (2) This section does not have effect in relation to a sale or transfer if the proceeds of the sale or transfer are chargeable to tax.]

[F8 (2A) F9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

[F10 (3) F11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(4) Where—

(a) the [F2 shares] are of such a character that the [F3 distribution] payable in respect thereof may be paid without deduction of income tax, and

(b) the owner or beneficiary does not show that the proceeds of any sale or other realisation of the right to receive the [F3 distribution] which is deemed to be his income by virtue of this section have been charged to [F12 income tax under Chapter 13 of Part 4 of ITTOIA 2005 (sales of foreign dividend coupons)],

[F13 then that [F14 distribution] shall be charged to income tax.

(4A) The income tax chargeable by virtue of subsection (4) above shall, subject to subsection (5) below, be charged on the full amount of the [F15 distribution] in the year of assessment.

(4B) The person liable for any tax chargeable by virtue of subsection (4) above is the owner or beneficiary, but he shall be entitled to credit for any tax which the [F16 distribution] is shown to have borne.]

(5) [F17 But], in any case where, if the [F3 distribution] had been [F18 relevant foreign income], the computation of tax would have been made by reference to the amount received in the United Kingdom, [F19 the income tax chargeable by virtue of subsection (4) above] shall be computed on the full amount of the sums which have been or will be received in the United Kingdom in the year of assessment or any subsequent year in which the owner remains the owner of the [F2 shares].

(6) In relation to corporation tax, subsections (4) and (5) above shall not apply but, subject to the provisions of the Tax Acts about distributions, the owner or beneficiary shall, in respect of any [F3 distribution] which is deemed to be his income by virtue of this section, be chargeable to corporation tax under Case VI of Schedule D unless he shows that the proceeds of any sale or other realisation of the right to receive that [F3 distribution] have been charged to tax [F20 by virtue of section 18(3B)].

[F21 (7) In this section—

• “distribution”, in relation to shares in a company,—

  (a)

  has the same meaning as it has in the Corporation Tax Acts (see section 209), but

  (b)

  also includes any amount that would be a distribution if the company paying it were resident in the United Kingdom;

• “shares” means shares in a company.]

(8) The Board may by notice require any person to furnish them within such time as they may direct (not being less than 28 days), in respect of all [F2 shares] of which he was the owner at any time during the period specified in the notice, with such particulars as they consider necessary for the purposes of this section F22 . . . .

Textual Amendments

F1 S. 730 heading substituted (with effect in accordance with Sch. 7 para. 2(13) of the amending Act) by virtue of Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 2(12)

F2 Words in s. 730 substituted (with effect in accordance with Sch. 7 para. 2(13) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 2(2)(b)

F3 Words in s. 730 substituted (with effect in accordance with Sch. 7 para. 2(13) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 2(2)(a)

F4 Words in s. 730(1)(a) substituted (with effect in accordance with Sch. 7 para. 2(13) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 2(3)(a)

F5 Words in s. 730(1)(b) substituted (with effect in accordance with Sch. 7 para. 2(13) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 2(3)(b)

F6 S. 730(1)(c) repealed (with effect in accordance with Sch. 7 para. 2(13) of the repealing Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 2(3)(c), Sch. 11 Pt. 2(8), Note

F7 S. 730(2) substituted (with effect in accordance with Sch. 7 para. 2(13) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 2(4)

F8 S. 730(2A) inserted (with effect in accordance with s. 82(2) of the amending Act) by Finance Act 2002 (c. 23), Sch. 25 para. 51

F9 S. 730(2A) repealed (with effect in accordance with Sch. 7 para. 2(13) of the repealing Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 2(5), Sch. 11 Pt. 2(8), Note

F10 S. 730(3) substituted (with effect in accordance with Sch. 7 para. 2(13) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 2(6)

F11 S. 730(3) repealed (with effect in accordance with Sch. 6 para. 2(3) of the repealing Act) by Finance Act 2006 (c. 25), Sch. 6 para. 2(2), Sch. 26 Pt. 3(12), Note

F12 Words in s. 730(4)(b) 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. 300(3)(a) (with Sch. 2)

F13 Words in s. 730(4) and s. 730(4A)(4B) substituted for words in s. 730(4) (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. 300(3)(b) (with Sch. 2)

F14 Word in s. 730(4) substituted (with effect in accordance with Sch. 7 para. 2(13) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 2(7)

F15 Word in s. 730(4A) substituted (with effect in accordance with Sch. 7 para. 2(13) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 2(8)

F16 Word in s. 730(4B) substituted (with effect in accordance with Sch. 7 para. 2(13) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 2(9)

F17 Word in s. 730(5) 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. 300(4)(a) (with Sch. 2)

F18 Words in s. 730(5) 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. 300(4)(b) (with Sch. 2)

F19 Words in s. 730(5) 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. 300(4)(c) (with Sch. 2)

F20 Words in s. 730(2)(4)(b)(6)(8) substituted (with effect in accordance with Sch. 7 para. 32 of the amending Act) by Finance Act 1996 (c. 8), Sch. 7 para. 23 (with Sch. 7 paras. 33-35)

F21 S. 730(7) substituted (with effect in accordance with Sch. 7 para. 2(13) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 2(10)

F22 Words in s. 730(8) repealed (with effect in accordance with Sch. 7 para. 2(13) of the repealing Act) by Finance (No. 2) Act 2005 (c. 22), Sch. 7 para. 2(11), Sch. 11 Pt. 2(8), Note

Marginal Citations

M1 Source—1970 s.470; 1971 Sch.6 71