Income Tax Act 2007

238 (1) Amend Schedule 23A (manufactured dividends and interest) as follows. U.K.

(2) In paragraph 1(1)—

(a) omit the definition of “interest manufacturer”,

(b) in the definition of “manufactured dividend”, “manufactured interest” and “manufactured overseas dividend” omit “, “manufactured interest”” and “, 3”, and

(c) after that definition insert—

• ““manufactured interest” means an amount—

  (a)

  which is representative of a periodical payment of interest on United Kingdom securities, and

  (b)

  which, under a contract or other arrangements for the transfer of the securities, one of the parties is required to pay to the other;”.

(3) In paragraph 2 (manufactured dividends on UK equities: general)—

(a) in sub-paragraph (2) before “Tax” insert “ Corporation ”,

(b) in sub-paragraph (3)(b) before “Tax” insert “ Corporation ”,

(c) omit sub-paragraph (3)(c) and the “and” immediately before it,

(d) in sub-paragraph (6)(a) omit “to which sub-paragraph (3) above applies”,

(e) in sub-paragraph (6) after paragraph (a) insert “, and

(aa) the dividend manufacturer is a non-UK resident company within the charge to corporation tax,”, and

(f) in sub-paragraph (7)(c) after “sub-paragraph (3)(b) above” insert “ or section 573(2) of ITA 2007 ”.

(4) Omit paragraphs 2A to 3A (deductibility of manufactured payment in case of manufacturer of UK equities; manufactured interest on UK securities: general; and manufactured interest on gilt-edged securities etc).

(5) In paragraph 4 (manufactured overseas dividends)—

(a) omit sub-paragraphs (2) to (3B),

(b) in sub-paragraph (4)—

(i) for “sub-paragraph (2) above” substitute “ section 922(2) of ITA 2007 (amount of income tax to be deducted at source) ”,

(ii) for “sub-paragraph (3) above” substitute “ section 923 of that Act (income tax to be accounted for and paid) ”,

(iii) for “Tax Acts” substitute “ Corporation Tax Acts ”,

(iv) omit the words from “as they apply” to “branch or agency in the United Kingdom”,

(v) in paragraph (a) for “persons” substitute “ companies ”, for “him” substitute “ the recipient ” and for “under sub-paragraph (2) above” substitute “ under section 922(2) of ITA 2007 ”, and

(vi) in paragraph (b) for “persons” substitute “ companies ” and for “him” substitute “ the recipient ”,

(c) in sub-paragraph (5) omit paragraph (a),

(d) omit sub-paragraph (6),

(e) omit sub-paragraphs (7) and (7AA), and

(f) in sub-paragraph (9) before “Tax” insert “ Corporation ”.

(6) In paragraph 7 (irregular manufactured payments)—

(a) in sub-paragraph (1)—

(i) omit “manufactured interest or”,

(ii) omit “3 or”,

(iii) omit “interest or”,

(iv) omit “, as the case may be” where it occurs for the first time,

(v) omit “, 3(1)”,

(vi) for “Tax Acts” substitute “ Corporation Tax Acts ”, and

(vii) for “paragraphs 2 or 3” substitute “ paragraph 2 ”,

(b) in sub-paragraph (1A) omit “manufactured interest or”,

(c) in sub-paragraph (3)—

(i) for “Tax Acts” substitute “ Corporation Tax Acts ”,

(ii) omit “3(1) or”,

(iii) omit “manufactured interest or”, and

(iv) omit “3 or”, and

(d) in sub-paragraph (4)(b) omit “or set off” and “income or”.

(7) In paragraph 7A(10) for the definition of “tax advantage” substitute—

““tax advantage” has the meaning given by section 840ZA;”.

(8) In paragraph 8 (dividend manufacturing regulations: general)—

(a) in sub-paragraph (1)—

(i) omit “, manufactured interest” in both places where it occurs,

(ii) omit “, interest manufacturers”,

(iii) for “2 to 4” substitute “ 2 and 4 ”, and

(iv) before “Tax Acts” insert “ Corporation ”,

(b) in sub-paragraph (1A)—

(i) before “Tax Acts” insert “ Corporation ”, and

(ii) omit “or the 1992 Act”,

(c) in sub-paragraph (2)—

(i) omit paragraphs (c) and (d),

(ii) omit “or to”, and

(iii) omit “, manufactured interest or manufactured overseas dividends”,

(d) omit sub-paragraph (2A), and

(e) in sub-paragraph (3)—

(i) in paragraph (a) after “apply” insert “ for corporation tax purposes ”, and

(ii) omit paragraph (b).