Finance Act 2007

Requirements to deduct tax from manufactured payments: creditor repos and debtor repos

13 (1) If a company has a creditor repo, Chapter 9 of Part 15 of ITA 2007 (deduction of income tax at source: manufactured payments) has effect in relation to the lender while the arrangement is in force as if—

(a) the lender paid the borrower amounts which are representative of the income payable on the securities that are initially sold,

(b) the payments were made under requirements of the arrangement, and

(c) the payments were made on the dates on which the income is payable.

(2) If a company has a debtor repo, the reverse charge provisions of Chapter 9 of Part 15 of ITA 2007 have effect in relation to the borrower while the arrangement is in force as if—

(a) the lender paid the borrower amounts which are representative of the income payable on the securities that are initially sold,

(b) the payments were made under requirements of the arrangements, and

(c) the payments were made on the dates on which the income is payable.

(3) If sub-paragraph (1) or (2) applies, any payment actually made under an arrangement which is representative of any income payable on any securities is to be treated for the purposes of Chapter 9 of Part 15 of ITA 2007 as if it had not been made.

(4) In this paragraph “the reverse charge provisions of Chapter 9 of Part 15 of ITA 2007” means—

(a) regulations under section 918(4) of ITA 2007 (manufactured dividends on UK shares (Real Estate Investment Trusts): the reverse charge),

(b) section 920 of that Act (foreign payers of manufactured interest: the reverse charge), and

(c) section 923 of that Act (foreign payers of manufactured overseas dividends: the reverse charge).