Corporation Tax Act 2010

90 (1) In relation to distributions paid before 1 July 2009, Chapters 2 and 3 of Part 17 have effect with the following modifications. U.K.

(2) Section 783 is omitted.

(3) The following is substituted for section 784—

“784 Manufactured dividends on shares

(1) This section applies if a person pays a manufactured dividend to another person.

(2) The Corporation Tax Acts apply in relation to—

(a) the recipient of the manufactured dividend, and

(b) companies claiming title through or under the recipient,

as if the manufactured dividend were a dividend on the shares.

(3) If the payer is a UK resident company, the Corporation Tax Acts apply in relation to the payer as if the manufactured dividend were a dividend of the company.

(4) Subsection (1) is subject to—

(a) section 786 (treatment of recipient: Real Estate Investment Trusts),

(b) section 796 (manufactured dividends: amounts exceeding underlying payments), and

(c) section 803 (power to deal with special cases).”

(4) In section 786(1) “ (instead of section 784(2)) ” is substituted for “(instead of section 784(1))”.

(5) Section 787 is omitted.

(6) In section 788(6)(a) “ section 784(2) ” is substituted for “section 784(1)”.

(7) The following is substituted for section 791—

“791 Treatment of payer of manufactured overseas dividend

(1) This section applies if a person (“the payer”) pays another person a manufactured overseas dividend.

(2) If—

(a) the payer is a company carrying on a trade, and

(b) the manufactured overseas dividend relates to the trade,

the manufactured overseas dividend is treated as an expense of the trade.

(3) If—

(a) the payer is a company with an investment business, and

(b) the manufactured overseas dividend relates to the business,

the manufactured overseas dividend is treated as expenses of management within Part 16 of CTA 2009 (companies with investment business).

(4) Subsection (5) applies if the payer is a company carrying on life assurance business.

(5) So far as the manufactured overseas dividend is referable to basic life assurance and general annuity business, the manufactured overseas dividend is treated for the purposes of section 76 of ICTA (expenses of insurance companies) as if it were an expense payable falling to be brought into account at step 3 of section 76(7) of ICTA (amount of expenses deduction).

(6) The manufactured overseas dividend is to be treated as so referable so far as the overseas dividend of which it is representative—

(a) is treated under section 432A of ICTA (apportionment of income and gains) as so referable, or

(b) would be so treated if received by the payer.”

(8) Section 795 is omitted.