246D Individuals etc.U.K.
(1)Where a company pays a foreign income dividend in a case in which an individual is beneficially entitled to the dividend, that individual shall be treated as having received on the date of the payment income of an amount which, if reduced by an amount equal to income tax on that income at the lower rate for the year of assessment in which the date of the payment fell, would be equal to the amount of the dividend.
(2)Where subsection (1) above applies—
(a)[F1the individual shall be treated as having paid income tax at the lower rate on that income] or, if his total income is reduced by any deductions, on so much of it as is part of his total income as so reduced;
(b)no repayment shall be made of income tax treated by virtue of paragraph (a) above as having been paid;
(c)to the extent that it would not otherwise be so treated, that income shall be treated [F2(without prejudice to paragraph (a) above) as if it were income to which section 1A applies;]
(d)that income shall be treated for the purposes of sections 348 and 349(1) as not brought into charge to income tax.
(3)Where a company pays a foreign income dividend to the personal representatives of a deceased person as such during the administration period, the amount of income which, if the case had been one in which an individual was beneficially entitled to the dividend, that individual would be treated under subsection (1) above as having received shall be deemed for the purposes of Part XVI to be part of the aggregate income of the estate of the deceased; and the preceding provisions of this subsection shall be construed as if they were contained in Part XVI.
[F3(3A)Without prejudice to subsection (3) above, a foreign income dividend paid as mentioned in that subsection to personal representatives shall not be treated for the purposes of income tax as income of the personal representatives as such.]
(4)Where a company pays a foreign income dividend to trustees and the dividend is income to which section 686 applies—
(a)there shall be ascertained the amount of income which, if the case had been one in which an individual was beneficially entitled to the dividend, that individual would be treated under subsection (1) above as having received;
(b)income of that amount shall be treated as having arisen to the trustees on the date of the payment and as if it had been chargeable to income tax at the lower rate;
(c)paragraphs (a) to (d) of subsection (2) above shall, with the substitution of “income” for “total income” and with all other necessary modifications, apply to that income as they apply to income which an individual is treated as having received under subsection (1) above.
(5)Subsections (1) and (1A) of section 233 shall not apply where the distribution mentioned in either of those subsections is a foreign income dividend [F4to which an individual is beneficially entitled, a foreign income dividend paid to personal representatives or a foreign income dividend paid to trustees in a case in which the dividend is income to which section 686 applies.]
Textual Amendments
F1Words in s. 246D(2)(a) substituted (with effect in accordance with s. 121(8) of the amending Act) by Finance Act 1996 (c. 8), s. 122(5)(a)
F2Words in s. 246D(2)(c) substituted (with effect in accordance with Sch. 6 para. 28 of the amending Act) by Finance Act 1996 (c. 8), Sch. 6 para. 5
F3S. 246D(3A) inserted (with effect in accordance with s. 76(6) of the amending Act) by Finance Act 1995 (c. 4), s. 76(1)
F4Words in s. 246D(5) inserted (retrospectively) by Finance Act 1996 (c. 8), Sch. 27 para. 2