Income Tax (Trading and Other Income) Act 2005 (c. 5)

Part 4 U.K. Savings and investment income

Chapter 3 U.K. Dividends etc. from UK resident companies etc.

Charge to tax on dividends and other distributions U.K.

383 Charge to tax on dividends and other distributions U.K.

(1) Income tax is charged on dividends and other distributions of a UK resident company.

(2) For income tax purposes such dividends and other distributions are to be treated as income.

(3) For the purposes of subsection (2), it does not matter that those dividends and other distributions are capital apart from that subsection.

384 Income charged U.K.

(1) Tax is charged under this Chapter on the amount or value of the dividends paid and other distributions made in the tax year.

(2) Subsection (1) is subject to—

• section 393(2) and (3) (later charge where cash dividends retained in SIPs are paid over), and

• section 394(3) (distribution when dividend shares cease to be subject to SIP).

(3) See also section 398 (under which the amount or value of the dividends or other distributions is treated as increased if any person is entitled to a tax credit in respect of them).

385 Person liable U.K.

(1) The person liable for any tax charged under this Chapter is—

(a) the person to whom the distribution is made or is treated as made (see Part 6 of ICTA and sections 386(3) and 389(3)), or

(b) the person receiving or entitled to the distribution.

(2) Subsection (1) is subject to—

• section 393(4) (later charge where cash dividends retained in SIPs are paid over), and

• section 394(4) (distribution when dividend shares cease to be subject to SIP).