Part 15Deduction of income tax at source

Chapter 9Manufactured payments

Manufactured dividends

918Manufactured dividends on UK shares: Real Estate Investment Trusts

(1)

This section applies if—

(a)

a person pays a manufactured dividend as mentioned in section 573(1), and

(b)

the manufactured dividend is representative of a dividend which is—

(i)

paid by a company to which Part 4 of FA 2006 applies (Real Estate Investment Trusts) in respect of profits of C (tax-exempt), or

(ii)

paid by the principal company of a group to which that Part applies in respect of profits of G (property rental business).

(2)

This section applies only so far as the manufactured dividend is representative of such a dividend.

(3)

If the payer—

(a)

is UK resident, or

(b)

pays the manufactured dividend in the course of a trade carried on through a branch or agency in the United Kingdom,

regulations under section 973 apply to the payer as they apply to a company to which Part 4 of FA 2006 applies, with any necessary modifications.

(4)

The Treasury may by regulations provide, in a case where the payer—

(a)

is non-UK resident, and

(b)

pays the manufactured dividend otherwise than in the course of a trade carried on through a branch or agency in the United Kingdom,

for a United Kingdom recipient of the manufactured dividend to be liable to account for and pay income tax in respect of it.

(5)

A United Kingdom recipient is a recipient who—

(a)

is UK resident, or

(b)

is non-UK resident but receives the manufactured dividend for the purposes of a trade carried on by the recipient through a branch or agency in the United Kingdom.

(6)

The amount of income tax which the recipient may be liable to account for and pay under regulations under subsection (4) is equal to the amount of the sum representing income tax which the payer would have been required to deduct in accordance with regulations under section 973.

(7)

For the purposes of—

(a)

regulations under section 973 as applied by subsection (3), and

(b)

regulations under subsection (4),

the “gross amount” of a manufactured dividend to which this section applies is equal to the gross amount of the dividend of which it is representative.