A person liable to tax under this Chapter is treated as having paid income tax at the dividend ordinary rate on the income charged, and where trustees are so liable (because a cash dividend paid to them in respect of the shares would have been to any extent income to which section 686 of ICTA applies) the income is treated as if it had been chargeable to tax at that rate.

The income tax treated as paid under subsection (1) is not repayable.

The amount on which an individual is treated under subsection (1) as having paid income tax is reduced if subsection (4) applies.

This subsection applies if the individual’s total income is reduced by any deductions which fall to be made from the part of the income charged to tax under this Chapter.

The reduction under subsection (3) is equal to the amount of those deductions.