Corporation Tax Act 2009

Chapter 6U.K.Sale of foreign dividend coupons

974Charge to tax under this ChapterU.K.

(1)The charge to corporation tax on income applies to income treated under subsection (2) as arising from foreign holdings.

(2)Income is treated as arising from such holdings in the following cases.

(3)The first case is where a bank's office in the United Kingdom—

(a)pays over the proceeds of a sale or other realisation of [F1taxable] dividend coupons in respect of the holdings which has been effected by the bank, or

(b)carries such proceeds into an account.

(4)The second case is where proceeds of sale arise from a sale of [F2taxable] dividend coupons in respect of the holdings by a person who is not a bank or a dealer to a person dealing in coupons in the United Kingdom.

[F3(4A)For the purposes of subsections (3) and (4) a dividend coupon is “taxable” if the associated dividend would not have been exempt for the purposes of Part 9A (company distributions) had it been paid to the holder of the shares.]

(5)The amount of the income that is treated as arising is equal to the proceeds of the sale or realisation.

(6)In this section “bank” has the meaning given by [F4section 1120 of CTA 2010].

Textual Amendments

F1Word in s. 974(3)(a) inserted (with effect in accordance with Sch. 14 para. 31 of the amending Act) by Finance Act 2009 (c. 10), Sch. 14 para. 25(2)

F2Word in s. 974(4) inserted (with effect in accordance with Sch. 14 para. 31 of the amending Act) by Finance Act 2009 (c. 10), Sch. 14 para. 25(3)

F3S. 974(4A) inserted (with effect in accordance with Sch. 14 para. 31 of the amending Act) by Finance Act 2009 (c. 10), Sch. 14 para. 25(4)

F4Words in s. 974(6) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 664 (with Sch. 2)

975Meaning of “foreign holdings” etcU.K.

(1)In this Chapter “foreign holdings” means shares outside the United Kingdom that are issued by or on behalf of a non-UK resident body of persons.

(2)In section 974 “dividend coupons” means coupons for dividends payable in respect of foreign holdings.

(3)In this Chapter “coupons” includes—

(a)warrants, and

(b)bills of exchange that purport to be drawn or made in payment of dividends payable in respect of foreign holdings.