Corporation Tax Act 2010

791 Treatment of payer of manufactured overseas dividend U.K.

(1) This section applies if—

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

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

(2) For this purpose an overseas 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—

(a) the payer carries on a trade to which the manufactured overseas dividend relates, and

(b) neither subsection (4) nor subsection (6) applies,

the manufactured overseas dividend is treated as an expense of the trade.

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

(5) Subsection (6) applies if the payer carries on life assurance business to which the manufactured overseas dividend relates.

(6) So far as the manufactured overseas dividend is referable to basic life assurance and general annuity business, the manufactured overseas dividend is treated as if it were an expense payable falling to be brought into account at Step 3 in section 76(7) of ICTA (amount of expenses deduction).

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

(a) is received by the payer and is so referable under section 432A of ICTA (apportionment of income and gains), or

(b) is received by another person and would have been so referable under section 432A of ICTA if it had been received by the payer.