Finance Act 2006

139 Manufactured dividends U.K.

(1) This section applies to a manufactured dividend [F1 for the purposes of the Corporation Tax Acts] if and to the extent that it is representative of a dividend paid by a company to which this Part applies in respect of profits of C (tax-exempt).

[F2 (1A) Paragraph 2 of Schedule 23A to ICTA has effect with the modifications set out in subsections (2) and (2A). ]

(2) [F3 For sub-paragraph (2) there is substituted—]

“(2) Sub-paragraphs [F4 (2A) and (2B)] apply if and to the extent that a manufactured dividend is representative of a dividend in respect of profits of the tax-exempt business of a company to which Part 4 of the Finance Act 2006 applies.

(2A) The [F5 Corporation] Tax Acts shall have effect in relation to the recipient, and persons claiming title through or under him, as if the manufactured dividend were a dividend to which section 121 of that Act applied.

(2B) In relation to the dividend manufacturer—

(a) if the dividend manufacturer is a company and the manufactured dividend is paid in the course of a trade carried on in the United Kingdom, it shall be treated as an expense of the trade;

(b) if the manufactured dividend is paid in connection with investment business, it shall be treated for the purposes of [F6 Chapter 2 of Part 16 of CTA 2009] as expenses of management;

(c) in the case of a company carrying on life assurance business, in so far as the manufactured dividend is referable to basic life assurance and general annuity business (or is or would be, if received by the company, be treated as referable to business of that kind by virtue of section 432A) it shall be treated for the purposes of section 76 as if it were an expense payable falling to be brought into account at Step 3 of section 76(7);

(d) F7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2C) F8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2D) F8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2E) F8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .”

[F9 (2A) Sub-paragraphs (6) to (8) are omitted.]

(3) F10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) F10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) F11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F12 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) In this section “dividend manufacturer” and “manufactured dividend” have the meaning given by Schedule 23A to ICTA.

Textual Amendments

F1 Words in s. 139(1) inserted (6.4.2007 with effect as mentioned in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), s. 1027, Sch. 1 para. 621(2) (with transitional provisions and savings in Sch. 2)

F2 S. 139(1A) inserted (retrospective to 6.4.2007 and with effect in accordance with art. 1(2) of the amending S.I.) by The Income Tax Act 2007 (Amendment) (No. 2) Order 2009 (S.I. 2009/2859), arts. 1(1), 3(2)

F3 Words in s. 139(2) substituted (retrospective to 6.4.2007 and with effect in accordance with art. 1(2) of the amending S.I.) by The Income Tax Act 2007 (Amendment) (No. 2) Order 2009 (S.I. 2009/2859), arts. 1(1), 3(3)

F4 Words in s. 139(2) substituted (6.4.2007 with effect as mentioned in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), s. 1027, Sch. 1 para. 621(3)(a) (with transitional provisions and savings in Sch. 2)

F5 Word in s. 139(2) inserted (6.4.2007 with effect as mentioned in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), s. 1027, Sch. 1 para. 621(3)(b) (with transitional provisions and savings in Sch. 2)

F6 Words in s. 139(2) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 691 (with Sch. 2 Pts. 1, 2)

F7 Words in s. 139(2) repealed (6.4.2007 with effect as mentioned in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1027, 1031, Sch. 1 para. 621(3)(c), Sch. 3 Pt. 1 (with transitional provisions and savings in Sch. 2)

F8 Words in s. 139(2) repealed (6.4.2007 with effect as mentioned in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1027, 1031, Sch. 1 para. 621(3)(d), Sch. 3 Pt. 1 (with transitional provisions and savings in Sch. 2)

F9 S. 139(2A) inserted (retrospective to 6.4.2007 and with effect in accordance with art. 1(2) of the amending S.I.) by The Income Tax Act 2007 (Amendment) (No. 2) Order 2009 (S.I. 2009/2859), arts. 1(1), 3(4)

F10 S. 139(3)(4) repealed (6.4.2007 with effect as mentioned in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1027, 1031, Sch. 1 para. 621(4), Sch. 3 Pt. 1 (with transitional provisions and savings in Sch. 2)

F11 S. 139(5) repealed (with effect in accordance with s. 47 of the amending Act and art. 3 of the affecting S.I.) by Finance Act 2007 (c. 11), ss. 47, 114, Sch. 14 para. 20, {Sch. 27 Pt. 2(14) Note}; S.I. 2007/2483, art. 3

F12 S. 139(6) omitted (21.7.2008) by virtue of Finance Act 2008 (c. 9), Sch. 17 para. 35(2)(b)