Income and Corporation Taxes Act 1988

[F1 737C Deemed manufactured payments: further provisions. U.K.

(1) This section applies where section 737A applies.

(2) Subsection (3) below applies where—

(a) the dividend mentioned in section 737A(2)(a) is a dividend on United Kingdom equities, and

(b) by virtue of section 737A(5), F2 . . . paragraph 2 of Schedule 23A applies, in relation to the payment which is treated under section 737A(5) as having been made;

and in subsection (3) below “the deemed manufactured dividend” means that payment.

(3) Where this subsection applies—

(a) the amount of the deemed manufactured dividend shall be taken to be an amount equal to the amount of the dividend mentioned in section 737A(2)(a);

(b) the repurchase price of the securities shall be treated, for the purposes of [F3 section 730A], as increased by an amount equal to the gross amount of the deemed manufactured dividend.

(4) In subsection (3) above the reference to the gross amount of the deemed manufactured dividend is to the aggregate of—

(a) the amount of the deemed manufactured dividend, and

(b) the amount of the tax credit that would have been issued in respect of the deemed manufactured dividend had the deemed manufactured dividend in fact been a dividend on the United Kingdom equities.

(5) F4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) F4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) Subsection (8) below applies where—

(a) the dividend mentioned in section 737A(2)(a) is a periodical payment of interest on United Kingdom securities, and

(b) by virtue of section 737A(5), paragraph 3 of Schedule 23A applies in relation to the payment which is treated under section 737A(5) as having been made F5 . . . ;

and in subsection (8) below “the deemed manufactured interest” means the payment referred to in paragraph (b) above.

(8) Where this subsection applies—

[F6 (a) the amount which by virtue of section 737A(5) is taken to be the gross amount of the deemed manufactured payment for the purposes of paragraph 3 of Schedule 23A shall be taken to be the gross amount of the deemed manufactured interest for the purposes of this section;]

(b) any deduction which, by virtue of [F7 that paragraph], is required to be made out of the gross amount of the deemed manufactured interest shall be deemed to have been made.

(9) Where F8 . . . subsection (8) above applies, the repurchase price of the securities shall be treated, for the purposes of [F3 section 730A], as increased by the gross amount of the deemed manufactured interest.

(10) Subsection (11) below applies where—

(a) the dividend mentioned in section 737A(2)(a) is an overseas dividend, and

(b) by virtue of section 737A(5), paragraph 4 of Schedule 23A applies in relation to the payment which is treated under section 737A(5) as having been made;

and in subsection (11) below “the deemed manufactured overseas dividend” means that payment.

(11) Where this subsection applies—

(a) the gross amount of the deemed manufactured overseas dividend shall be taken to be the amount found under paragraph 4(5)(b) and (c) of Schedule 23A;

(b) any deduction which, by virtue of paragraph 4 of Schedule 23A, is required to be made out of the gross amount of the deemed manufactured overseas dividend shall be deemed to have been made;

(c) the repurchase price of the securities shall be treated, for the purposes of [F3 section 730A], as increased by the gross amount of the deemed manufactured overseas dividend.

[F9 (11A) The deemed increase of the repurchase price which is made for the purposes of section 730A by subsection (3)(b), (9) or (11)(c) above shall also have effect—

(a) for all the purposes of the Tax Acts, other than section 737A, and

(b) in cases where section 263A of the 1992 Act does not apply, for the purposes of the 1992 Act,

wherever in consequence of that increase there is for the purposes of section 730A no difference between the sale price and the repurchase price.]

[F10 (11B) F11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(12) In this section—

(a) “United Kingdom equities”, “United Kingdom securities” and “overseas dividend” have the meanings given by paragraph 1(1) of Schedule 23A;

(b) “the repurchase price of the securities” shall be construed in accordance with section 737B(4).]

Textual Amendments

F1 Ss. 737A-737C inserted (3.5.1994) by Finance Act 1994 (c. 9), s. 122

F2 Words in s. 737C(2)(b) repealed (with effect in accordance with Sch. 18 Pt. 6(10) Notes 3, 4 of the repealing Act) by Finance Act 1997 (c. 16), Sch. 18 Pt. 6(10); S.I. 1997/991, art. 2

F3 Words in s. 737C(3)(b)(9)(11)(c) substituted (with effect in accordance with s. 80(5) of the amending Act) by Finance Act 1995 (c. 4), s. 80(3)

F4 S. 737C(5)(6) repealed (with effect in accordance with Sch. 18 Pt. 6(10) Note 3 of the repealing Act) by Finance Act 1997 (c. 16), Sch. 18 Pt. 6(10); S.I. 1997/991, art. 2

F5 Words in s. 737C(7)(b) repealed (with effect in accordance with Sch. 18 Pt. 6(10) Notes 3, 4 of the repealing Act) by Finance Act 1997 (c. 16), Sch. 18 Pt. 6(10); S.I. 1997/991, art. 2

F6 S. 737C(8)(a) substituted (with effect in accordance with Sch. 10 para. 16(1) of the amending Act) by Finance Act 1997 (c. 16), Sch. 10 para. 11(2) (with Sch. 10 para. 16(3))

F7 Words in s. 737C(8)(b) substituted (with effect in accordance with Sch. 10 para. 16(1) of the amending Act) by Finance Act 1997 (c. 16), Sch. 10 para. 11(2) (with Sch. 10 para. 16(3))

F8 Words in s. 737C(9) repealed (with effect in accordance with Sch. 18 Pt. 6(10) Notes 3, 4 of the repealing Act) by Finance Act 1997 (c. 16), Sch. 18 Pt. 6(10); S.I. 1997/991, art. 2

F9 S. 737C(11A) inserted (with effect in accordance with s. 80(5) of the amending Act) by Finance Act 1995 (c. 4), s. 80(3)

F10 S. 737C(11B) inserted (with effect in accordance with s. 159(3) of the amending Act) by Finance Act 1996 (c. 8), s. 159(3); S.I. 1996/2646, art. 2

F11 S. 737C(11B) repealed (with effect in accordance with Sch. 18 Pt. 6(10) Note 3 of the repealing Act) by Finance Act 1997 (c. 16), Sch. 18 Pt. 6(10); S.I. 1997/991, art. 2

Modifications etc. (not altering text)

C1 S. 737C applied (with modifications) (2.1.1996) by The Sale and Repurchase of Securities (Modification of Enactments) Regulations 1995 (S.I. 1995/3220), regs. 1, 5