Income and Corporation Taxes Act 1988

Interpretation U.K.

F1 1 (1) In this Schedule—

• “approved stock lending arrangement” means an arrangement such as is mentioned in subsection (1), (2) or (2A) of section 129 and in relation to which that section and section [F2 271(9) of the 1992 Act] apply;

• “dividend manufacturer” has the meaning given by paragraph 2(1) below;

• “dividend manufacturing regulations” means regulations made by the Treasury under this Schedule;

• “interest manufacturer” has the meaning given by paragraph 3(1) below;

• “manufactured dividend”, “manufactured interest” and “manufactured overseas dividend” shall be construed respectively in accordance with paragraphs 2, 3 and 4 below, as shall references to the gross amount thereof;

• “market maker”, in relation to any shares, stock or other securities, means a person who—

(a) holds himself out at all normal times in compliance with the rules of the Stock Exchange as willing to buy and sell shares, stock or other securities of the kind concerned at a price specified by him, and

(b) is recognised as doing so by the Council of the Stock Exchange,

but subject to any regulations under sub-paragraph (2) below;

• “overseas dividend” means any interest, dividend or other annual payment payable in respect of any overseas securities;

• “overseas dividend manufacturer” has the meaning given by paragraph 4(1) below;

• “overseas securities” means—

(a) shares, stock or other securities issued by a government or public or local authority of a territory outside the United Kingdom or by any other body of persons not resident in the United Kingdom; and

(b) quoted [F3 Eurobonds (as defined by section 124) held in a recognised clearing system] ;

• “overseas tax” means tax under the law of a territory outside the United Kingdom;

• “overseas tax credit” means any such credit under the law of a territory outside the United Kingdom in respect of overseas tax as corresponds to a tax credit;

• “prescribed” means prescribed in dividend manufacturing regulations;

• “recognised clearing house” means a recognised clearing house within the meaning of the Financial Services Act 1986;

• “recognised investment exchange” means a recognised investment exchange within the meaning of that Act;

• “securities” includes any loan stock or similar security;

• “transfer” includes any sale or other disposal;

• [F4 “unapproved manufactured payment", subject to any regulations under sub- paragraph (2) below, means—

(a) any manufactured dividend paid in connection with an unapproved stock lending arrangement, and

(b) any manufactured dividend not falling within paragraph (a) above which is paid in respect of United Kingdom equities by a person other than one who is—

(i) a market maker in relation to United Kingdom equities of the kind in question, or

(ii) in such circumstances as may be prescribed, a member, of a prescribed class or description, of a prescribed recognised investment exchange, or

(iii) in such circumstances as may be prescribed, a prescribed recognised clearing house,

and which is so paid otherwise than in connection with an approved stock lending arrangement;]

• “unapproved stock lending arrangement” means an arrangement such as is mentioned in subsection (1), (2) or (2A) of section 129, but which, in consequence of regulations under subsection (4) of that section, is not an approved stock lending arrangement;

• “United Kingdom equities” means shares of any company resident in the United Kingdom;

• “United Kingdom securities” means securities of the government of the United Kingdom, of any public or local authority in the United Kingdom or of any company or other body resident in the United Kingdom, but does not include quoted [F3 Eurobonds (as defined by section 124) held in a recognised clearing system], or United Kingdom equities.

(2) Dividend manufacturing regulations may amend sub-paragraph (1) above—

(a) by changing the definition for the time being of “market maker”; or

(b) by changing the definition for the time being of “unapproved manufactured payment”.

Textual Amendments

F1 Sch. 23A inserted by Finance Act 1991 (c. 31, SIF 63:1), s. 58, Sch. 13 para. 1 (with effect as mentioned in s. 58(3) in relation to payments made on or after such day as may be specified: 26.2.1992 specified for certain purposes by S.I. 1992/173, reg.2; 30.6.1992 specified for certain purposes by S.I. 1992/1346, regs.2, 3, 4; 21.4.1993 specified for certain purposes by S.I. 1993/933, regs.2, 3(b), 4)

F2 Words in Sch. 23A para. 1 substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch. 10 para. 14(61) (with ss. 60, 101(1), 171, 201(3))

F3 Words in Sch. 23A para. 1(1) substituted (with effect in accordance with Sch. 7 para. 32 of the amending Act) by Finance Act 1996 (c. 8), Sch. 7 para. 28(1)(a)(b) (with Sch. 7 para. 33-35)

F4 Words in Sch. 23A para. 1(1) substituted (28.5.1996) by The Income Tax (Unapproved Manufactured Payments) Regulations 1996 (S.I. 1996/1226), reg. 2