Corporation Tax Act 2010 (c. 4)

Part 17 U.K. Manufactured payments and repos

Chapter 2 U.K. Manufactured dividends

783 Treatment of payer of manufactured dividend U.K.

(1) This section applies if—

(a) a company (“the payer”) pays a manufactured dividend, and

(b) the dividend of which the manufactured dividend is representative is taxable.

(2) For this purpose a dividend is taxable if—

(a) it is received by the payer and the charge to corporation tax on income applies to it, or

(b) it is received by a person other than the payer and the charge to corporation tax on income would have applied to it if it had been received by the payer.

(3) If the payer carries on a trade to which the manufactured dividend relates, the manufactured dividend is treated as an expense of the trade.

(4) But subsection (3) does not apply so far as the manufactured dividend is treated as mentioned in subsection (5) or (6).

(5) If the payer has investment business to which the manufactured dividend relates the manufactured dividend is treated as expenses of management of the business for the purposes of Part 16 of CTA 2009.

(6) If the payer carries on life assurance business to which the manufactured dividend relates, then so far as the manufactured dividend is referable to basic life assurance and general annuity business it is treated [F1 for the purposes of section 76 of FA 2012 as a deemed BLAGAB management expense for the accounting period in which it is paid.]

(7) For the purposes of subsection (6), the manufactured dividend is treated as referable to basic life assurance and general annuity business so far as the dividend of which it is representative—

(a) is received by the payer and is so referable [F2 in accordance with Chapter 4 of Part 2 of FA 2012] (apportionment of income and gains), or

(b) is received by another person and would have been so referable [F3 in accordance with that Chapter] if it had been received by the payer.

(8) This section is subject to—

(a) section 796 (manufactured dividends: amounts exceeding underlying payments), and

(b) section 803 (power to deal with special cases).

Textual Amendments

F1 Words in s. 783(6) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 220(2)

F2 Words in s. 783(7)(a) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 220(3)(a)

F3 Words in s. 783(7)(b) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 220(3)(b)