In section 123 of the Taxes Act 1988 (foreign dividends) the following subsections shall be inserted after subsection (6)—
“(7)In a case where—
(a)relevant foreign dividends referred to in subsection (2) above are dividends (as opposed to interest or other annual payments),
(b)they are entrusted by a company which at the time they are entrusted (the relevant time) is not resident in the United Kingdom,
(c)they are entrusted for payment to a company which at the relevant time is resident in the United Kingdom,
(d)at the relevant time the company mentioned in paragraph (c) above directly or indirectly controls not less than 10 per cent. of the voting power in the company mentioned in paragraph (b) above, and
(e)the relevant time falls on or after 1st January 1992,
subsection (2) above shall not apply.
(8)In a case where—
(a)foreign dividends referred to in subsection (3)(a) above are dividends (as opposed to interest or other annual payments),
(b)they are paid by a company which at the time of the payment (the relevant time) is not resident in the United Kingdom,
(c)payment is obtained on behalf of a company which at the relevant time is resident in the United Kingdom,
(d)at the relevant time the company mentioned in paragraph (c) above directly or indirectly controls not less than 10 per cent. of the voting power in the company mentioned in paragraph (b) above, and
(e)the relevant time falls on or after 1st January 1992,
subsection (3) above shall not apply.”