SCHEDULES

SCHEDULE 27 Foreign income dividends

International headquarters company

F14

1

Section 246S of that Act (conditions for treatment as international headquarters company) shall be amended as follows.

2

In subsection (3) (wholly-owned subsidiary of foreign quoted parent company), in paragraph (a), for “wholly owned by” there shall be substituted “ a 100 per cent. subsidiary of ”.

3

Subsection (8) (extension of subsection (3)) shall cease to have effect.

4

After subsection (10) there shall be inserted the following subsection—

10A

For the purposes of this section a company is a 100 per cent. subsidiary of another if and so long as it is a body corporate all of whose share capital would fall to be treated for the purposes of section 838 as owned directly or indirectly by the other and that other is a body corporate; but for this purpose references in that section to owning share capital shall be construed in accordance with subsection (12) below.

5

Subject to sub-paragraph (6) below, this paragraph has effect in relation to any accounting period ending after 28th November 1995.

6

Where—

a

this paragraph has effect under sub-paragraph (5) above in relation to an accounting period in which a dividend is paid, and

b

the immediately preceding period ended on or before 28th November 1995,

subsection (9) (requirement to be international headquarters company in the period before that in which a dividend is paid) shall have effect in the case of that dividend as if this paragraph also had effect in relation to that immediately preceding period.