The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 2003

Amendments to regulation 5

6.—(1) Amend regulation 5 (tax treatment of approved manufactured dividends paid to persons resident outside the United Kingdom)(1) as follows.

(2) In paragraph (1)—

(a) at the beginning insert “Subject to paragraph (1A),”;

(b) for “the circumstances prescribed by paragraph (2)” substitute “either of the circumstances prescribed by paragraphs (1B) and (2)”.

(3) After paragraph (1) insert—

“(1A) Where a manufactured overseas dividend is paid in the circumstances prescribed by paragraph (1B) by a person who is not an approved United Kingdom intermediary, the dividend shall be treated, for the purposes of the provisions of the Tax Acts relating to the charge to tax under Schedule D and so far as the payer is concerned, as if the amount paid was an annual payment, within section 349(1) of the Taxes Act, but so that no amount is required to be deducted on account of income tax from the amount of the payment, or accounted for under section 350 of that Act.

(1B) The circumstances prescribed by this paragraph are where—

(a) a manufactured overseas dividend is paid by a person who is resident in the United Kingdom, or, if not so resident, makes the payment in the course of a trade which he carries on through a permanent establishment in the United Kingdom;

(b) the payment is to or for the benefit of a person beneficially entitled to it who is not a United Kingdom recipient; and

(c) regulation 4(1) does not apply.”.

(4) In paragraph (2)—

(a) for the words from “where a manufactured overseas dividend” to the word “or” immediately preceding sub-paragraph (b) substitute—

• “where—

  (a)

  a manufactured overseas dividend is paid by an approved United Kingdom intermediary who, if not resident in the United Kingdom, makes the payment in the course of a trade which he carries on through a permanent establishment in the United Kingdom; and;”

(b) in sub-paragraph (b)(ii) for the words from “branch or agency” to “applies” substitute “permanent establishment in the United Kingdom and makes the payment to or for the benefit of a person beneficially entitled to it who is not a United Kingdom recipient”.

(1)

Regulation 5 was amended by regulation 4 of S.I. 1996/1229 and regulation 6 of S.I. 1996/2643.