Part 15Deduction of income tax at source
Chapter 6Deduction from annual payments and patent royalties
Supplementary
904Annual payments for dividends or non-taxable consideration
1
For the purposes of section 899(5)(f) and 903(2)(b) this section applies to an annual payment which meets the conditions in subsections (2) to (7).
2
The payment must be a payment charged to—
a
income tax under Part 5 of ITTOIA 2005, or
b
corporation tax under Case III of Schedule D.
3
The payment must be made under a liability incurred for consideration in money or money’s worth all or any of which—
a
consists of a dividend or the right to receive a dividend, or
b
is not required to be brought into account in calculating for the purposes of income tax or corporation tax the income of the person making the payment.
4
The payment must not be a payment of income—
a
which arises under a settlement made by one party to a marriage or civil partnership by way of provision for the other—
i
after the dissolution or annulment of the marriage or civil partnership, or
ii
while they are separated under an order of a court, or under a separation agreement, or if the separation is likely to be permanent, and
b
which is payable to, or applicable for the benefit of, the other party.
5
The payment must not be made by an individual for genuine commercial reasons in connection with the individual’s trade, profession or vocation.
6
The payment must not be made to an individual under a liability incurred at any time in consideration of the individual surrendering, assigning or releasing an interest in settled property to or in favour of a person with a subsequent interest.
7
The payment must not be a payment of an annuity granted in the ordinary course of a business of granting annuities.
8
In the application of this section to Scotland the reference in subsection (6) to settled property is to be read as a reference to property held in trust.
905Interpretation of Chapter
In this Chapter “individual” includes a Scottish partnership if at least one partner is an individual.