Part 11Manufactured payments and repos

Chapter 3Tax credits: stock lending arrangements and repos

Repos

593No tax credits for interim holder under repo

(1)

This section applies if—

(a)

there is a repo in respect of UK shares F1or overseas shares ,

(b)

under the repo, the original owner has transferred the F2... shares to the interim holder,

(c)

a qualifying distribution is made to the interim holder,

(d)

the qualifying distribution is, or is a payment representative of, a dividend in respect of the F3... shares, and

(e)

a manufactured dividend F4or manufactured overseas dividend representative of the dividend is paid by the interim holder in respect of any UK shares F5or overseas shares in respect of which the repo is made.

(2)

The interim holder is not entitled to a tax credit under section 397(1) F6or F7397A(1) of ITTOIA 2005 (tax credits for qualifying distributions) in respect of the distribution.

(3)

If the interim holder 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.