Income Tax Act 2007

592 No tax credits for borrower under stock lending arrangement U.K.

(1) This section applies if—

(a) there is a stock lending arrangement in respect of UK shares, [F1 or overseas shares,]

(b) a qualifying distribution is made to the person who is the borrower under the arrangement,

(c) the qualifying distribution is, or is a payment representative of, a dividend in respect of the F2 ... shares, and

(d) a manufactured dividend [F3 or manufactured overseas dividend] representative of the dividend is paid by the borrower in respect of any UK shares [F4 or overseas shares] in respect of which the arrangement is made.

(2) The borrower is not entitled to a tax credit under section 397(1) [F5 or [F6 397A(1)]] of ITTOIA 2005 (tax credits for qualifying distributions) in respect of the distribution.

(3) If the borrower is UK resident, section 399(2) of ITTOIA 2005 (recipients of qualifying distributions treated as having paid income tax at dividend ordinary rate on them) does not apply in respect of the distribution.

Textual Amendments

F1 Words in s. 592(1)(a) inserted (21.7.2008 with effect in accordance with s. 34(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 12 para. 27(2)(a)

F2 Word in s. 592(1)(c) omitted (21.7.2008 with effect in accordance with s. 34(2) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 12 para. 27(2)(b)

F3 Words in s. 592(1)(d) inserted (21.7.2008 with effect in accordance with s. 34(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 12 para. 27(2)(c)(i)

F4 Words in s. 592(1)(d) inserted (21.7.2008 with effect in accordance with s. 34(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 12 para. 27(2)(c)(ii)

F5 Words in s. 592(2) inserted (21.7.2008 with effect in accordance with s. 34(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 12 para. 27(3)

F6 Word in s. 592(2) substituted (with effect in accordance with Sch. 19 para. 14 of the amending Act) by Finance Act 2009 (c. 10), Sch. 19 para. 13(b)