Income Tax Act 2007

Stock lending arrangementsU.K.

596Deemed manufactured payments: stock lending arrangementsU.K.

[F1(1)This section applies if conditions A to C are met.

(1A)Condition A is that there is a stock lending arrangement in respect of securities.

(1B)Condition B is that a dividend or interest on the securities is paid, as a result of the arrangement, to a person other than the person who is the lender under the arrangement.

(1C)Condition C is that—

(a)no provision is made for securing that the lender receives payments representative of the dividend or interest, or

(b)provision is made for securing that the lender receives—

(i)payments representative of the dividend or interest, and

(ii)another benefit in respect of the dividend or interest (including the release of the whole or part of any liability to pay an amount).]

(2)The rules about manufactured payments apply as if the person who is the borrower under the arrangement—

[F2(a)were required, under the arrangement—

(i)in a case falling within paragraph (a) of subsection (1C), to pay the lender an amount representative of the dividend or interest, or

(ii)in a case falling within paragraph (b) of that subsection, to pay the lender an amount representative of the dividend or interest but deducting from that amount any payment mentioned in sub-paragraph (i) of that paragraph on which tax has been, or is to be, charged, and]

(b)discharged the requirement when the dividend or interest was paid.

(3)But the borrower is not entitled (whether as a result of the rules about manufactured payments or otherwise) to an income deduction in respect of the deemed requirement to pay or the deemed payment.

(4)Income deduction” means—

(a)a deduction in calculating profits or gains for income tax purposes, or

(b)a deduction in calculating net income.

F3(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1S. 596(1)-(1C) substituted for s. 596(1) (with effect in accordance with s. 76(8) of the amending Act) by Finance Act 2013 (c. 29), s. 76(2)

F2S. 596(2)(a) substituted (with effect in accordance with s. 76(8) of the amending Act) by Finance Act 2013 (c. 29), s. 76(3)

F3S. 596(5) omitted (with effect in accordance with Sch. 12 para. 18(1) of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 12 para. 15(2)(a)

F4597Deemed interest: cash collateral under stock lending arrangementsU.K.

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Textual Amendments

F4Ss. 597-605 omitted (with effect in accordance with Sch. 12 para. 18(1) of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 12 para. 15(2)(b)

F4598Cash collateral under stock lending arrangements: supplementaryU.K.

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Textual Amendments

F4Ss. 597-605 omitted (with effect in accordance with Sch. 12 para. 18(1) of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 12 para. 15(2)(b)

F4599Sections 597 and 598: quasi-stock lending arrangements and quasi-cash collateralU.K.

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Textual Amendments

F4Ss. 597-605 omitted (with effect in accordance with Sch. 12 para. 18(1) of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 12 para. 15(2)(b)

F4600Meaning of “quasi-stock lending arrangements” and “quasi-cash collateral”U.K.

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Textual Amendments

F4Ss. 597-605 omitted (with effect in accordance with Sch. 12 para. 18(1) of the amending Act) by virtue of Finance Act 2013 (c. 29), Sch. 12 para. 15(2)(b)