Statutory Instruments
INCOME TAX
Made
9th August 1993
Laid before the House of Commons
9th August 1993
Coming into force
1st October 1993
1. These Regulations may be cited as the Income Tax (Manufactured Overseas Dividends) Regulations 1993 and shall come into force on 1st October 1993.
2.— [F1(1)] In these Regulations unless the context otherwise requires–
F2...
“approved United Kingdom collecting agent” means a person who is [F3a collecting agent F4... and who is] resident in the United Kingdom or, if not so resident, is carrying on a trade in the United Kingdom through a branch or agency and who [F5is approved by the Board for the purposes of these Regulations];
“approved United Kingdom intermediary” means an overseas dividend manufac– turer who is resident in the United Kingdom or, if not so resident, is carrying on a trade in the United Kingdom through a branch or agency and who is [F6approved as an intermediary by the Board for the purposes of these Regulations];
“the Board” means the Commissioners of Inland Revenue;
[F7“chargeable period” has the meaning given by regulation 2A;]
[F8“collecting agent” means a person who, in the course of carrying on a trade in the United Kingdom, collects or secures payment of overseas dividends for another person or acts as custodian of any overseas securities;]
“the Double Taxation Relief Regulations” means the Double Taxation Relief (Taxes on Income) (General) (Manufactured Overseas Dividends) Regulations 1993(3);
“gross amount of the manufactured overseas dividend” has the meaning given by paragraph 4(5)(b) of Schedule 23A;
“the Income Tax Acts” has the meaning given by section 831(1)(b) of the Taxes Act;
“the Management Act” means the Taxes Management Act 1970(4);
“manufactured overseas dividend” shall be construed in accordance with paragraph 4(1) of Schedule 23A;
“overseas dividend”, “overseas dividend manufacturer”, “overseas securities”, “overseas tax” and “overseas tax credit” have the meanings given by paragraph 1(1) of Schedule 23A;
“relevant withholding tax” has the meaning given by paragraph 4(5)(a) of Schedule 23A;
“Schedule 23A” means Schedule 23A to the Taxes Act;
“the Taxes Act” means the Income and Corporation Taxes Act 1988;
“the Tax Acts” has the meaning given by section 831(2) of the Taxes Act;
F9...
“United Kingdom recipient” has the meaning given by paragraph 4(3) of Schedule 23A.
[F10(2) References in regulations 3 to 11, 14 and 15 to manufactured overseas dividends do not include references to manufactured overseas dividends to which regulation 2B applies, and references in those regulations to overseas dividends do not include references to any overseas dividend of which a manufactured overseas dividend to which regulation 2B applies would be representative.]
Textual Amendments
F1Reg. 2 renumbered as reg. 2(1) (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 3(1)
F2Words in reg. 2 omitted (28.5.1996) by virtue of The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1996 (S.I. 1996/1229), regs. 1, 3(a)
F3Words in reg. 2 inserted (28.5.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1996 (S.I. 1996/1229), regs. 1, 3(b)(i)
F4Words in reg. 2(1) omitted (6.11.1996) by virtue of The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 3(2)(a)
F5Words in reg. 2 substituted (28.5.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1996 (S.I. 1996/1229), regs. 1, 3(b)(ii)
F6Words in reg. 2 substituted (28.5.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1996 (S.I. 1996/1229), regs. 1, 3(c)
F7Words in reg. 2 substituted (7.6.1995) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1995 (S.I. 1995/1324), regs. 1, 3
F8Words in reg. 2(1) substituted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 2001 (S.I. 2001/403), regs. 1(1), 2(2)
F9Words in reg. 2 omitted (28.5.1996) by virtue of The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1996 (S.I. 1996/1229), regs. 1, 3(d)
F10Reg. 2(2) inserted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 3(3)
Commencement Information
2A.—(1) In these Regulations “chargeable period”—
(a)as respects a company, means its accounting period for the purposes of corporation tax;
(b)as respects a person other than a company who [F12draws up accounts for any period (“the accounts period”), means] one of the periods specified in paragraph (2) below.
(c)as respects a person other than a company who [F13does not draw up accounts, means a year of assessment];
(2) The periods specified in this paragraph are—
(a)the period which begins at the beginning of the accounts period and ends at the expiration of 12 months from that date or, if earlier, at the end of the accounts period;
(b)any subsequent period which—
(i)begins at the end of the immediately preceding period, being a period specified in this paragraph, and
(ii)ends at the expiration of 12 months from that date or, if earlier, at the end of the accounts period.
F14(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]
Textual Amendments
F11Reg. 2A inserted (7.6.1995) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1995 (S.I. 1995/1324), regs. 1, 4
F12Words in reg. 2A(1)(b) substituted (1.7.1997) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1997 (S.I. 1997/988), regs. 1, 3(a)(i)
F13Words in reg. 2A(1)(c) substituted (1.7.1997) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1997 (S.I. 1997/988), regs. 1, 3(a)(ii)
F14Reg. 2A(3) omitted (1.7.1997) by virtue of The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1997 (S.I. 1997/988), regs. 1, 3(b)
2B.—(1) For the purposes of the provisions of the Tax Acts relating to the charge to tax under Schedule D, paragraph 4(2) and (3) F16..., of Schedule 23A shall not apply to a manufactured overseas dividend paid in the circumstances prescribed in paragraph (2).
(2) The circumstances prescribed are where the manufactured overseas dividend is representative of an overseas dividend on an overseas security that represents a loan relationship.
(3) Where the payer of a manufactured overseas dividend to which paragraph (2) applies is neither a company nor carrying on a trade in circumstances where the manufactured overseas dividend is taken into account in computing the profits of that trade, the manufactured overseas dividend shall be treated, for the purposes of the provisions of the Tax Acts relating to the charge to tax under Schedule D and so far as the payer is concerned, as if the amount paid was an annual payment, within section 349(1) of the Taxes Act, but so that no amount is required to be deducted on account of income tax from the amount of the payment, or accounted for under section 350 of that Act.
(4) Where the recipient of a manufactured overseas dividend to which paragraph (2) applies is neither a company nor carrying on a trade in circumstances where the manufactured overseas dividend is taken into account in computing the profits of that trade, the manufactured overseas dividend shall be treated, for the purposes of the provisions of the Tax Acts relating to the charge to tax under Schedule D and so far as the recipient is concerned, as an overseas dividend of an amount equal to the amount of the manufactured overseas dividend received by him, but not so as to entitle the recipient to claim relief under Part XVIII of the Taxes Act in respect of any tax attributable to the manufactured overseas dividend received.
(5) For the purposes of paragraph (2), an overseas security shall be taken to represent a loan relationship if a company holding that security would have a loan relationship within the meaning of section 81 of the Finance Act 1996.
(6) References in paragraph (4) to the recipient of a manufactured overseas dividend include references to any person claiming title to the manufactured overseas dividend through or under the recipient.]
Textual Amendments
F15Reg. 2B inserted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 4
F16Words in reg. 2B(1) omitted (1.7.1997) by virtue of The Stock Lending and Manufactured Payments (Revocations and Amendments) Regulations 1997 (S.I. 1997/987), regs. 1, 8(2)
3.—(1) Subject to paragraph (4), the rate of relevant withholding tax which is prescribed in relation to any manufactured overseas dividend is the rate which is equal to the rate (or, if more than one, the highest rate) at which tax would have been payable (and not repayable) under the law of the overseas territory specified in paragraph (3) in respect of–
(a)an overseas dividend paid on the same date that the manufactured overseas dividend is paid to a person who is–
(i)resident in the United Kingdom and not carrying on a trade outside the United Kingdom through a branch or agency,
(ii)subject to tax under the law of the United Kingdom, and
(iii)not subject to a special relationship with any other person as respects any commercial or financial dealings,
in respect of the same kind of overseas securities as those in respect of which the manufactured overseas dividend was paid, and
(b)the overseas tax credit, if any, relating to that overseas dividend.
(2) The reference in paragraph (1) above to tax which would have been payable is a reference to tax which would have been eligible for relief either–
(a)pursuant to arrangements made with the government of the overseas territory specified in paragraph (3) which have effect by virtue of section 788 of the Taxes Act and relate to the overseas dividend concerned, or
(b)by virtue of other provisions of Part XVIII of the Taxes Act other than section 790(5)(c)(ii) of that Act.
(3) The overseas territory specified in this paragraph is the territory of the government or public or local authority which issued the securities in question or, where the securities were issued by any other body of persons not resident in the United Kingdom, the territory under whose law that tax would have been payable.
(4) Where a manufactured overseas dividend is paid–
(a)to or for the benefit of–
(i)an individual beneficially entitled to the payment who is resident in a territory outside the United Kingdom, or
(ii)a company beneficially entitled to the payment whose central management and control is situated in a territory outside the United Kingdom and which is not resident in the United Kingdom, or
(iii)any other body of persons resident in a territory outside the United Kingdom, and
(b)in respect of securities issued by the government, or a public or local authority, of that territory or any other body of persons resident in that territory, and
(c)in circumstances where arrangements, if any, made between the United Kingdom and the government of that territory which have effect under section 788 of the Taxes Act do not contain an article providing for exemption from United Kingdom tax in respect of the payment as constituting income not expressly mentioned in other articles of the arrangements,
the rate prescribed in relation to that manufactured overseas dividend is the rate which is equal to the rate at which tax would have fallen to be deducted under the law of that territory in respect of–
(i)an overseas dividend paid to that recipient in respect of those securities, and
(ii)the overseas tax credit, if any, relating to that overseas dividend.
4.—(1) For the purposes of the provisions of the Tax Acts relating to the charge to tax under Schedule D other than paragraph 4(3) of Schedule 23A, [F17a manufactured overseas dividend] paid in the circumstances prescribed in paragraph (2)–
(a)shall not be treated as an annual payment pursuant to paragraph 4(2) of Schedule 23A;
(b)shall be paid without deduction of an amount on account of income tax;
(c)where the maker of the payment is an investment company within the meaning of section 130 of the Taxes Act, shall be treated as if it was an expense of management in relation to that company.
[F18(2) The circumstances prescribed by this paragraph are where—
(a)a manufactured overseas dividend is paid to an approved United Kingdom intermediary or an approved United Kingdom collecting agent by an overseas dividend manufacturer who—
(i)is resident in the United Kingdom or, if not so resident, makes the payment in the course of a trade which he carries on through a branch or agency in the United Kingdom, and
(ii)is not an approved United Kingdom intermediary; and
(b)the manufactured overseas dividend is not representative of the overseas dividend received by the overseas dividend manufacturer.]
(3) Subject to paragraph (4), the approved United Kingdom intermediary or approved United Kingdom collecting agent referred to in paragraph (2) shall account for and pay an amount of tax in respect of the manufactured overseas dividend which he receives equal to that which the maker of the payment would have been required to account for and pay had paragraph 4(2) of Schedule 23A applied to the payment.
(4) Paragraph (3) shall not apply where–
(a)the approved United Kingdom intermediary is entitled under regulation 5 to pay without deduction of tax [F17a manufactured overseas dividend] representative of the same overseas dividend as is represented by [F19the manufactured overseas dividend] received by him, or
[F20(aa)the approved United Kingdom intermediary is required to pay a manufactured overseas dividend representative of the same overseas dividend as is represented by the manufactured overseas dividend received by him, in circumstances where regulation 3(4) applies to the payment, or]
(b)the approved United Kingdom collecting agent has entered into arrangements with the Board under the Double Taxation Relief Regulations enabling him to pay without deduction of tax [F17a manufactured overseas dividend] representative of the same overseas dividend as is represented by [F19the manufactured overseas dividend] received by him, or
(c)the approved United Kingdom collecting agent is required to pay to an approved United Kingdom intermediary [F17a manufactured overseas dividend] representative of the same overseas dividend as is represented by [F19the manufactured overseas dividend] received by him, the approved United Kingdom intermediary is entitled as mentioned in sub–paragraph (a) above and issues a notice to the approved United Kingdom collecting agent authorising him to make the payment without deduction of tax.
Textual Amendments
F17Words in reg. 4 substituted (28.5.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1996 (S.I. 1996/1229), regs. 1, 4(a)
F18Reg. 4(2) substituted (1.7.1997) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1997 (S.I. 1997/988), regs. 1, 4
F19Words in reg. 4 substituted (28.5.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1996 (S.I. 1996/1229), regs. 1, 4(b)
F20Reg. 4(4)(aa) inserted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 5
Commencement Information
5.—(1) For the purposes of the provisions of the Tax Acts relating to the charge to tax under Schedule D, [F21a manufactured overseas dividend] paid in the circumstances prescribed by paragraph (2) shall not be treated as an annual payment pursuant to paragraph 4(2) of Schedule 23A, and accordingly shall be paid without deduction of an amount on account of income tax.
(2) The circumstances prescribed by this paragraph are where [F21a manufactured overseas dividend] is paid by an approved United Kingdom intermediary who, if not resident in the United Kingdom, makes the payment in the course of a trade which he carries on through a branch or agency in the United Kingdom, and either–
(a)the payment is made in circumstances where the approved United Kingdom intermediary has entered into arrangements with the Board under the Double Taxation Relief Regulations enabling him to make the payment without deduction of tax, or
(b)the payment is made to another approved United Kingdom intermediary or to an approved United Kingdom collecting agent as part of a chain of payments where–
(i)each payment in the chain is a payment by an approved United Kingdom intermediary or an approved United Kingdom collecting agent of [F21a manufactured overseas dividend] representative of the same overseas dividend,
(ii)the maker of the last payment in the chain, if not resident in the United Kingdom, makes the payment in the course of a trade which he carries on through a branch or agency in the United Kingdom and has [F22either] entered into arrangements under the Double Taxation Relief Regulations enabling him to make the payment without deduction of tax [F23or makes the payment in circumstances where regulation 3(4) applies], and
(iii)each recipient of a payment in the chain has issued a notice to the maker of the payment authorising him to make the payment without deduction of tax.
Textual Amendments
F21Words in reg. 5 substituted (28.5.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1996 (S.I. 1996/1229), regs. 1, 4(a)
F22Word in reg. 5(2)(b)(ii) inserted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 6(a)
F23Words in reg. 5(2)(b)(ii) inserted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 6(b)
Commencement Information
6.—(1) A notice given under regulation 4(4)(c) or regulation 5(2)(b)(iii) shall be in the form provided, or in a form authorised, by the Board.
(2) A recipient of such a notice–
(a)shall retain the notice for a period of six years and, whenever required to do so within that period, shall make it available for inspection by an officer of the Board, and
(b)if he receives more than one such notice during any chargeable period, shall in addition maintain a record showing–
(i)the date of each such notice received in that period, and
(ii)a description and the amount of the manufactured overseas dividend referred to in each such notice received in that period.
(3) A person who issues such a notice–
(a)shall retain a copy of it for a period of six years and, whenever required to do so within that period, shall make that copy available for inspection by an officer of the Board, and
(b)if he issues more than one such notice during any chargeable period, shall in addition maintain a record showing–
(i)the date of each such notice issued in that period, and
(ii)a description and the amount of the manufactured overseas dividend referred to in each such notice issued in that period.
(4) Any record required to be maintained by the recipient of a notice under paragraph (2)(b), or by the issuer of a notice under paragraph (3)(b), shall be retained by that person for a period of six years from the end of the chargeable period to which the record relates.
(5) Where the issuer of a notice fails to retain a copy of it for the period specified in paragraph (3)(a), or fails to maintain any such record as is specified in paragraph (3)(b) or to retain any such record for the period specified in paragraph (4), the Board may require that person to carry out, at his own expense, an audit of manufactured overseas dividends received by that person in order to ascertain the amount of tax, if any, liable to be deducted under paragraph 4(2) of Schedule 23A which was not deducted.
(6) The scope and method of the audit referred to in paragraph (5) shall be agreed between the Board and the issuer of the notice or, in the absence of agreement, determined by the Board, and the issuer of the notice shall account for and pay any tax which on the basis of the findings of the audit was liable to be deducted but which was not deducted from manufactured overseas dividends received by him.
6A.—(1) Where, in a case to which paragraph 4(3) of Schedule 23A applies, overseas tax was charged on, or in respect of, the making of the manufactured overseas dividend received by the United Kingdom recipient, the amount of tax to be accounted for and paid under that provision shall, for the purposes of the provisions of the Tax Acts relating to the charge to tax under Schedule D, be taken as reduced in accordance with paragraph (2) or, as the case may be, paragraph (3).
(2) Where the amount specified in paragraph (4) exceeds the amount specified in paragraph (5), the amount of tax shall be reduced so as to equal the amount of the excess.
(3) Where the amount specified in paragraph (4) is equal to or less than the amount specified in paragraph (5), the amount of tax shall be reduced to nil.
(4) The amount specified in this paragraph is the amount of the manufactured overseas dividend received by the United Kingdom recipient.
(5) The amount specified in this paragraph is the amount which the United Kingdom recipient would have received by way of the overseas dividend of which the manufactured overseas dividend is representative, had the overseas dividend been paid to him.
(6) Relief claimed by the United Kingdom recipient under Part XVIII of the Taxes Act in a case to which paragraph (2) applies, other than relief given by virtue of section 811 of that Act, shall not exceed the aggregate of the amount of tax accounted for and paid by the United Kingdom recipient under paragraph 4(3) of Schedule 23A and the amount of overseas tax charged on, or in respect of, the making of the manufactured overseas dividend received by him.]
Textual Amendments
F24Reg. 6A inserted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 7
7.—(1) For the purposes of the provisions of the Tax Acts relating to the charge to tax under Schedule D, tax shall not be required to be accounted for and paid pursuant to paragraph 4(3) of Schedule 23A by a United Kingdom recipient of a manufactured overseas dividend which is received by him in any of the circumstances prescribed by paragraph (2).
(2) The circumstances prescribed by this paragraph are where the United Kingdom recipient–
(a)is an approved United Kingdom intermediary who has entered into arrange– ments with the Board under the Double Taxation Relief Regulations enabling him to pay without deduction of tax a manufactured overseas dividend representative of the same overseas dividend as is represented by the manufactured overseas dividend received by him, or who is authorised by a notice under regulation 5(2)(b)(iii) to make such a payment without deduction of tax, or
(b)is an approved United Kingdom intermediary who is required to pay a manufactured overseas dividend representative of the same overseas dividend as is represented by the manufactured overseas dividend received by him, in circumstances where regulation 3(4) applies in relation to the payment, or
(c)is an approved United Kingdom collecting agent and the person beneficially entitled to the manufactured overseas dividend received by the approved United Kingdom collecting agent is not resident in the United Kingdom, or
(d)is an approved United Kingdom collecting agent who is required to pay to an approved United Kingdom intermediary [F25a manufactured overseas dividend] representative of the same overseas dividend as is represented by [F26the manufactured overseas dividend] received by him, the approved United Kingdom intermediary is enabled or authorised as mentioned in sub– paragraph (a) above and issues a notice to the approved United Kingdom collecting agent authorising him to pay [F26the manufactured overseas dividend] without deduction of tax, [F27or
(e)is an approved United Kingdom collecting agent or an approved United Kingdom intermediary in receipt of a manufactured overseas dividend who shows that the overseas dividend manufacturer concerned was entitled to payment of the overseas dividend of which the manufactured overseas dividend is representative either—
(i)as the holder of the overseas securities concerned, or
(ii)directly or indirectly from a person from whom he acquired those securities, or to whom he transferred them, and who was so entitled as the holder of those securities.]
(3) A notice given under paragraph (2)(d) shall be in the form provided, or in a form authorised, by the Board.
[F28(3A) Where by virtue of paragraph (1) tax is not required to be accounted for and paid pursuant to paragraph 4(3) of Schedule 23A in the circumstances prescribed by paragraph (2)(e), paragraph 4(4) of that Schedule shall apply as if the amount of tax required under paragraph 4(3) of that Schedule [F29were an amount equal to the excess of the gross amount of the overseas dividend over the amount of that overseas dividend received by the overseas dividend manufacturer and] had been accounted for and paid.]
(4) The United Kingdom recipient–
(a)shall maintain a record of all manufactured overseas dividends received by him in any chargeable period in the circumstances prescribed by paragraph (2), showing–
(i)a description and the amount of each such manufactured overseas dividend, and the date on which it was received, and
(ii)the total amount of all such manufactured overseas dividends received in that period;
(b)where he is an approved United Kingdom intermediary within sub–paragraph (b), or an approved United Kingdom collecting agent within sub–paragraph (c), of paragraph (2), shall in addition maintain a record of all manufactured overseas dividends paid by him as mentioned in sub–paragraph (b) or, as the case may be, sub–paragraph (c), of that paragraph in any chargeable period, showing–
(i)the name and address of the person beneficially entitled to each such payment,
(ii)a description and the amount of each such payment, and the date of the payment, and
(iii)the total amount of all such payments made in that period;
(c)shall retain any such record as is specified in sub–paragraph (a) or (b) of this paragraph for a period of six years from the end of the chargeable period to which the record relates, and shall make any such record available for inspection by an officer of the Board whenever required to do so during the period of retention;
(d)where he is an approved United Kingdom collecting agent within sub–paragraph (d) of paragraph (2), shall in addition–
(i)retain for a period of six years any notice received by him as mentioned in that sub–paragraph and, whenever required to do so, make it available for inspection by an officer of the Board, and
(ii)if he receives more than one such notice during any chargeable period, maintain a record showing the date of each such notice received in that period and a description and the amount of the manufactured overseas dividend referred to in each such notice, and retain the record for a period of six years from the end of the chargeable period to which the record relates.
(5) Where the United Kingdom recipient fails to maintain, or to retain for the requisite period, any such record as is referred to in paragraph (4), or fails to retain for the requisite period any such notice as is referred to in that paragraph, the Board may require that person to carry out, at his own expense, an audit of manufactured overseas dividends received by him in order to ascertain the amount of tax, if any, for which he was liable to account under paragraph 4(3) of Schedule 23A.
(6) The scope and method of the audit referred to in paragraph (5) shall be agreed between the Board and the United Kingdom recipient or, in the absence of agreement, shall be determined by the Board, and the United Kingdom recipient shall account for and pay any tax which on the basis of the findings of the audit he was liable under paragraph 4(3) of Schedule 23A to account for and pay.
Textual Amendments
F25Words in reg. 7 substituted (28.5.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1996 (S.I. 1996/1229), regs. 1, 4(a)
F26Words in reg. 7 substituted (28.5.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1996 (S.I. 1996/1229), regs. 1, 4(b)
F27Reg. 7(2)(e) and word inserted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 8(a)
F28Reg. 7(3A) inserted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 8(b)
F29Words in reg. 7(3A) inserted (1.7.1997) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1997 (S.I. 1997/988), regs. 1, 5
Commencement Information
F307A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F30Reg. 7A omitted (1.7.1997) by virtue of The Stock Lending and Manufactured Payments (Revocations and Amendments) Regulations 1997 (S.I. 1997/987), regs. 1, 8(3)
8. For all purposes of the Tax Acts as they apply in relation to persons resident in the United Kingdom or to persons not so resident but carrying on a business through a branch or agency in the United Kingdom, any manufactured overseas dividend to which regulation 4, 5 or 7 applies shall be treated in relation to the recipient, and all persons claiming title through or under him–
(a)as if it were an overseas dividend of an amount equal to the amount of the manufactured overseas dividend, or
(b)where paragraph (3) of regulation 4 applies and the amount of tax required under that paragraph in respect of the manufactured overseas dividend has been accounted for and paid, as if it were an overseas dividend of an amount equal to the gross amount of the manufactured overseas dividend, but paid after the withholding therefrom, on account of overseas tax, of the amount accounted for and paid; and the amount accounted for and paid shall accordingly be treated in relation to the recipient, and all persons claiming title through or under him, as an amount so withheld instead of an amount on account of income tax.
9.—[F31(1) In the circumstances prescribed by paragraph (2) and subject to paragraph (4), a person who is an overseas dividend manufacturer in any chargeable period shall be entitled to set off the amounts specified in paragraph (1A) against the sums specified in paragraph (1B).
(1A) The amounts specified in this paragraph are—
(a)amounts of overseas tax in respect of overseas dividends received by the overseas dividend manufacturer in the chargeable period;
(b)amounts of overseas tax charged on, or in respect of, the making of manufactured overseas dividends so received by him;
(c)amounts deducted under paragraph 4(2) of Schedule 23A from manufactured overseas dividends so received by him;
(d)amounts accounted for and paid under paragraph 4(3) of Schedule 23A in respect of manufactured overseas dividends so received by him;
(e)amounts accounted for and paid under regulation 4(3) in respect of manufactured overseas dividends so received by him.
(1B) The sums specified in this paragraph are sums due from the overseas dividend manufacturer on account of the amounts deducted by him under paragraph 4(2) of Schedule 23A from the manufactured overseas dividends paid by him in the chargeable period.]
(2) The circumstances prescribed by this paragraph are where–
(a)the overseas dividend manufacturer is an approved United Kingdom intermediary,
F32(aa). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b)the overseas dividends and manufactured overseas dividends referred to in [F33paragraph (1A)], if received by an overseas dividend manufacturer within sub– paragraph (a) of this paragraph who carries on a business in the ordinary course of which he receives overseas dividends and manufactured overseas dividends and pays manufactured overseas dividends, are such that a profit on the sale of the overseas securities to which those overseas dividends and manufactured overseas dividends relate would form part of the trading profits of that business,
F34(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(d)except in a case to which paragraph (3) applies, the overseas dividends or, as the case may be, the manufactured overseas dividends received by him, do not fall to be matched, in accordance with regulation 10(1), against manufactured overseas dividends paid by him in that period.
(3) This paragraph applies to a case where, under regulation 10(1), overseas dividends in respect of which overseas tax is payable received by the overseas dividend manufacturer in any chargeable period, and manufactured overseas dividends so received [F35on or in respect of the making of which overseas tax has been charged or] from which tax has been deducted or in respect of which tax falls to be accounted for and paid as mentioned in [F36paragraph (1A)] above, are matched against manufactured overseas dividends paid by him under deduction of tax in that period.
(4) Where paragraph (3) applies in respect of any chargeable period, the overseas dividend manufacturer shall be entitled to set off against each other–
(a)the tax [F37referred to in that paragraph that is] attributable to the matched overseas dividends and manufactured overseas dividends received, and
(b)the tax [F38referred to in that paragraph that is] attributable to the matched manufactured overseas dividends paid.
[F39(4A) Subject to paragraphs (4B) and (5), where overseas dividends or manufactured overseas dividends received by the overseas dividend manufacturer in any chargeable period fall to be matched, in accordance with regulation 10(1), against manufactured overseas dividends paid by him in that period, relief under Part XVIII of the Taxes Act may not be claimed by the overseas dividend manufacturer in respect of any tax referred to in paragraph (1A) that is attributable to those overseas dividends or manufactured overseas dividends received.
(4B) Where overseas dividends or manufactured overseas dividends received by the overseas dividend manufacturer in any chargeable period fall to be matched, in accordance with regulation 10(1), against manufactured overseas dividends to which regulation 5 applies that are paid by him in that period, relief under section 811 of the Taxes Act shall be given to the overseas dividend manufacturer in respect of any tax referred to in paragraph (1A) that is attributable to those overseas dividends or manufactured overseas dividends received.
(4C) Subject to paragraph (5), where tax referred to in paragraph (1A) that is attributable to overseas dividends or manufactured overseas dividends received by the overseas dividend manufacturer in any chargeable period is set off, in accordance with this regulation, against tax referred to in paragraph (1B) that is attributable to manufactured overseas dividends paid by him in that period, relief under Part XVIII of the Taxes Act may not be claimed by the overseas dividend manufacturer in respect of any tax referred to in paragraph (1A) that is attributable to those overseas dividends or manufactured overseas dividends received.]
(5) Except in a case to which paragraph (3) applies, where in accordance with this regulation tax is set off by an overseas dividend manufacturer in any chargeable period and in relation to that period the sum of the overseas tax and amounts referred to in [F40paragraph (1A)] exceeds the total amount of the sums due as mentioned in [F41paragraph (1B)], relief under Part XVIII of the Taxes Act may be claimed by the overseas dividend manufacturer in respect of the amount of the excess.
(6) Where in accordance with this regulation tax is set off by an overseas dividend manufacturer in any chargeable period and in relation to that period the total amount of the sums due from the overseas dividend manufacturer as mentioned in [F42paragraph (1B)] exceeds the sum of the overseas tax and amounts referred to in [F43paragraph (1A)], the amount of the excess shall be payable to the Board.
(7) References to overseas tax in this regulation are references to the amount of such tax which is eligible for relief under Part XVIII of the Taxes Act either–
(a)pursuant to arrangements made with the government of the overseas territory specified in paragraph (8) which have effect by virtue of section 788 of the Taxes Act and relate to the overseas dividend [F44or manufactured overseas dividend] concerned, or
(b)by virtue of other provisions of Part XVIII of the Taxes Act other than section 790(5)(c)(ii) of that Act.
(8) The overseas territory specified [F45in this paragraph—
(i)so far as overseas dividends are concerned, is the territory of the government or public or local authority which issued the securities in question or, where the securities were issued by any other body of persons not resident in the United Kingdom, the territory under whose law that tax would have been payable;
(ii)so far as manufactured overseas dividends are concerned, is the territory of the government by which tax is charged on, or in respect of, the making of the manufactured overseas dividend concerned.]
Textual Amendments
F31Reg. 9(1)-(1B) substituted for reg. 9(1) (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 10(a)
F32Reg. 9(2)(aa) omitted (6.11.1996) by virtue of The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 10(b)(i)
F33Words in reg. 9(2)(b) substituted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 10(b)(ii)
F34Reg. 9(2)(c) and word omitted (28.5.1996) by virtue of The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1996 (S.I. 1996/1229), regs. 1, 5
F35Words in reg. 9(3) inserted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 10(c)(i)
F36Words in reg. 9(3) substituted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 10(c)(ii)
F37Words in reg. 9(4)(a) inserted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 10(d)
F38Words in reg. 9(4)(b) inserted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 10(d)
F39Reg. 9(4A)-(4C) substituted for reg. 9(4A) (1.7.1997) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1997 (S.I. 1997/988), regs. 1, 6
F40Words in reg. 9(5) substituted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 10(f)(i)
F41Words in reg. 9(5) substituted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 10(f)(ii)
F42Words in reg. 9(6) substituted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 10(f)(ii)
F43Words in reg. 9(6) substituted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 10(f)(i)
F44Words in reg. 9(7)(a) inserted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 10(g)
F45Reg. 9(8)(i)(ii) and words substituted for words (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 10(h)
Commencement Information
9A.—(1) An overseas dividend manufacturer who is not an approved United Kingdom intermediary shall be entitled to set off in any chargeable period amounts of overseas tax in respect of overseas dividends received by him in that chargeable period against sums due from him on account of the amounts deducted by him under paragraph 4(2) of Schedule 23A from manufactured overseas dividends paid by him in that chargeable period that are representative of those overseas dividends.
(2) Where overseas tax referred to in paragraph (1) is set off against sums referred to in that paragraph, relief under Part XVIII of the Taxes Act may not be claimed by the overseas dividend manufacturer in respect of that overseas tax.
(3) References in this regulation to overseas tax shall be construed in accordance with regulation 9(7).]
Textual Amendments
F46Reg. 9A inserted (1.7.1997) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1997 (S.I. 1997/988), regs. 1, 7
10.—(1) For the purpose of paragraphs (2)(d) and (3) of regulation 9, overseas dividends paid on overseas securities of a particular kind in respect of a particular dividend date which are received in any chargeable period by an overseas dividend manufacturer, and manufactured overseas dividends representative of those overseas dividends which are received by him in that period–
(a)shall be matched against manufactured overseas dividends representative of those overseas dividends which are paid by him in that period in accordance with the following order of priority–
(i)manufactured overseas dividends received without deduction of tax [F47other than manufactured overseas dividends in respect of which tax falls to be accounted for and paid under paragraph 4(3) of Schedule 23A or regulation 4(3)];
(ii)overseas dividends received; and
(iii)manufactured overseas dividends received [F48to which tax referred to in regulation [F499(1A)] is attributable]; and
(b)shall first be matched against manufactured overseas dividends paid without deduction of tax under paragraph 4(2) of Schedule 23A by reason of–
(i)notices issued to him under regulation 5(2)(b)(iii), or
(ii)arrangements entered into with the Board under the Double Taxation Relief Regulations, or
(iii)in cases to which paragraph (4) of regulation 3 applies, the application of that paragraph resulting in a rate of relevant withholding tax of nil per cent.,
and the balance, if any, shall be matched against manufactured overseas dividends paid by him from which tax has been deducted under paragraph 4(2) of Schedule 23A.
[F50(2) Where under paragraph (1) an overseas dividend or manufactured overseas dividend received is matched with a manufactured overseas dividend paid, any voucher relating to the deduction of overseas tax from the overseas dividend or manufactured overseas dividend received shall, subject to paragraph (3), be forwarded to the recipient of the manufactured overseas dividend paid.
(3) Where under paragraph (1) an overseas dividend received, or a manufactured overseas dividend received on or in respect of the making of which overseas tax has been charged, is matched with more than one manufactured overseas dividend paid, the overseas dividend manufacturer—
(a)shall endeavour to obtain from the payer of the overseas dividend or manufactured overseas dividend received a voucher corresponding to each manufactured overseas dividend paid, or
(b)if, despite reasonable attempts to do so, he is unable to obtain such a voucher, shall prepare a voucher corresponding to each manufactured overseas dividend paid and showing the following amounts—
(i)so much of the gross amount of the overseas dividend or manufactured overseas dividend received as corresponds to the gross amount of the manufactured overseas dividend paid,
(ii)so much of the overseas tax in respect of the overseas dividend or manufactured overseas dividend received as would be eligible for relief as mentioned in regulation 9(7) and relates to the amount of the overseas dividend or manufactured overseas dividend calculated in paragraph (i) above, and
(iii)so much of the actual amount of the overseas dividend or manufactured overseas dividend received as corresponds to the amount of the manufactured overseas dividend paid, and
(c)shall forward the voucher obtained or, as the case may be, prepared by him to the recipient of the manufactured overseas dividend paid by him to which the voucher relates, instead of the voucher referred to in paragraph (2).]
(4) Where a voucher has been forwarded as mentioned in paragraph (3)(c) and subsequently a manufactured overseas dividend received by an overseas dividend manufacturer to which that voucher relates is matched under paragraph (1) with more than one manufactured overseas dividend paid, the overseas dividend manufacturer–
(a)shall endeavour to obtain from the payer of the overseas dividend of which the manufactured overseas dividend received is representative [F51or (as the case may be) from the payer of the manufactured overseas dividend received] a voucher corres– ponding to each such manufactured overseas dividend paid, or
(b)if, despite reasonable attempts to do so, he is unable to obtain such a voucher, shall prepare a voucher corresponding to each such manufactured overseas dividend paid and showing the details specified in paragraphs (i) to (iii) of paragraph (3)(b), and
(c)shall forward the voucher obtained or, as the case may be, prepared by him to the recipient of the manufactured overseas dividend to which the voucher relates.
Textual Amendments
F47Words in reg. 10(1)(a)(i) substituted (7.6.1995) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1995 (S.I. 1995/1324), regs. 1, 6(a)
F48Words in reg. 10(1)(a)(iii) substituted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 11(a)
F49Word in reg. 10(1)(a)(iii) substituted (1.7.1997) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1997 (S.I. 1997/988), regs. 1, 8
F50Reg. 10(2)(3) substituted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 11(b)
F51Words in reg. 10(4)(a) inserted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 11(c)
Commencement Information
11.—(1) Within 30 days of the end of a chargeable period–
(a)an overseas dividend manufacturer shall pay to the Board all amounts which he was liable to deduct under paragraph 4(2) of Schedule 23A on account of income tax from manufactured overseas dividends paid by him in that period;
(b)an overseas dividend manufacturer who is an approved United Kingdom intermediary shall pay to the Board the amount of any excess payable under regulation 9(6) attributable to that period;
(c)a United Kingdom recipient shall pay to the Board all amounts of tax for which he was liable to account under paragraph 4(3) of Schedule 23A in respect of manufactured overseas dividends received by him in that period;
(d)an approved United Kingdom intermediary or an approved United Kingdom collecting agent shall pay to the Board all amounts of tax for which he was liable to account under regulation 4(3) in respect of F52... manufactured overseas dividends received by him in that period.
(2) Within [F5330] days of the end of a chargeable period–
(a)an overseas dividend manufacturer shall make a return to the Board or an inspector, in such form as the Board may prescribe, showing–
(i)the amounts which he was liable to deduct under paragraph 4(2) of Schedule 23A on account of income tax from F54... manufactured overseas dividends paid by him in that period, and
F55(ii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(iii)the amount of any excess payable under regulation 9(6) attributable to that period;
(b)a United Kingdom recipient shall make a return to the Board or an inspector, in such form as the Board may prescribe, showing the amounts of tax for which he was liable to account under paragraph 4(3) of Schedule 23A in respect of manufactured overseas dividends received by him in that period;
(c)an approved United Kingdom intermediary or an approved United Kingdom collecting agent shall make a return to the Board or an inspector, in such form as the Board may prescribe, showing the amounts of tax for which he was liable to account under regulation 4(3) in respect of F56... manufactured overseas dividends received by him in that period.
(3) Any amount referred to in paragraph (1) shall be due at the end of the period of 30 days specified in that paragraph and shall be payable without the making of any assessment but may be assessed on the overseas dividend manufacturer or, as the case may be, the United Kingdom recipient, approved United Kingdom intermediary or approved United Kingdom collecting agent (whether or not it has been paid when the assessment is made) if it is not paid in full on or before that date.
(4) In any case where–
(a)it appears to the inspector that there is–
(i)a manufactured overseas dividend paid, or an overseas dividend or a manufactured overseas dividend received, by an overseas dividend manufacturer in a chargeable period, or
(ii)an overseas dividend or a manufactured overseas dividend received by a United Kingdom recipient, an approved United Kingdom intermediary or an approved United Kingdom collecting agent in a chargeable period,
which ought to have been but which has not been included in a return under paragraph (2) relating to that period, or
(b)the inspector is dissatisfied with any return under paragraph (2),
the inspector may make an assessment to the best of his judgment on the overseas dividend manufacturer or, as the case may be, the United Kingdom recipient, approved United Kingdom intermediary or approved United Kingdom collecting agent.
(5) Any income tax due under an assessment made by virtue of paragraph (4) shall be treated for the purposes of interest on unpaid tax as having been payable at the end of the period of 30 days specified in paragraph (1).
(6) Any amount for which an approved United Kingdom intermediary is liable to account under regulation 6(6), and any amount for which a United Kingdom recipient is liable to account under regulation 7(6), in respect of manufactured overseas dividends received by them in a chargeable period, shall be due at the end of the period of 30 days from the end of that period, and shall be payable without the making of any assessment but may be assessed on the approved United Kingdom intermediary or, as the case may be, the United Kingdom recipient (whether or not it has been paid when the assessment is made) if it is not paid in full on or before that date.
(7) The like provisions as are contained in the Income Tax Acts with respect to the time within which an assessment may be made, so far as they refer or relate to the year of assessment for which an assessment is made, or the year to which an assessment relates, shall have effect in relation to an assessment under this regulation notwithstanding that, under this regulation, the assessment may be said to relate to a period which is not a year of assessment; and the like provisions as are contained in section 36 of the Management Act(5) as to the circumstances in which an assessment may be made out of time shall have effect accordingly on the footing that any such assessment relates to the year of assessment in which the period in question ends.
(8) Income tax assessed on a person under this regulation shall be due at the end of the period of 30 days after the issue of the notice of assessment (unless due earlier under paragraph (3) or (6)).
(9) Any tax assessable under any one or more of the provisions of this regulation may be included in one assessment if the tax so included is all due on the same date.
(10) Section 31(6) and Part V of the Management Act shall apply to an appeal against any assessment to tax under this regulation.
(11) Subsections (1), (7) and (8) of section 87 of the Management Act(7) shall apply to tax assessable under this regulation as they apply to tax assessable in accordance with Schedules 13 and 16 to the Taxes Act, and accordingly those subsections shall have effect as if references to those schedules included references to this regulation.
(12) Section 98 of the Management Act(8) shall apply in relation to a return under paragraph (2) with the modification specified in paragraph (13).
(13) At the end of the second column of the Table in section 98 of the Management Act there shall be inserted–
“Regulation 11(2) of the Income Tax (Manufactured Overseas Dividends) Regulations 1993”.
Textual Amendments
F52Word in reg. 11(1)(d) omitted (28.5.1996) by virtue of The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1996 (S.I. 1996/1229), regs. 1, 6(a)
F53Word in reg. 11(2) substituted (1.7.1997) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1997 (S.I. 1997/988), regs. 1, 9(1) (with reg. 9(2))
F54Word in reg. 11(2)(a)(i) omitted (28.5.1996) by virtue of The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1996 (S.I. 1996/1229), regs. 1, 6(a)
F55Reg. 11(2)(a)(ii) omitted (28.5.1996) by virtue of The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1996 (S.I. 1996/1229), regs. 1, 6(b)
F56Word in reg. 11(2)(c) omitted (28.5.1996) by virtue of The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1996 (S.I. 1996/1229), regs. 1, 6(a)
Commencement Information
12.—[F57(1) This regulation applies to a case where a manufactured overseas dividend is paid to a collecting agent in circumstances where, had it been the overseas dividend of which it is representative, it would have been—
(a)a foreign dividend (as defined in section 18(3D) of the Taxes Act, or
(b)interest on a quoted Eurobond (as defined by section 124 of that Act) held in a recognised clearing system.]
(2) Where this regulation applies–
(a)F58... deduction of an amount determined by reference to the gross amount of the manufactured overseas dividend shall be made by the F59... collecting agent from the manufactured overseas dividend on account of income tax similar to the deduction that would, in the case of the overseas dividend of which the manufactured overseas dividend is representative, have been made under [F60Chapter VIIA of Part IV of the Taxes Act]; and
[F61(b)the provisions of that Chapter relating to collecting agents shall apply in relation to amounts falling to be deducted under sub-paragraph (a) as if references in that Chapter to relevant dividends, or the proceeds of sale or other realisation of coupons for relevant dividends, included references to manufactured overseas dividends to which this regulation applies or, as the case may be, the proceeds of sale or other realisation of manufactured overseas dividends to which this regulation applies.]
F62(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F57Reg. 12(1) substituted (6.11.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 12(a)
F58Words in reg. 12(2)(a) omitted (9.12.1997) by virtue of The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1997 (S.I. 1997/2706), regs. 1, 2(a)
F59Words in reg. 12(2)(a) omitted (6.11.1996) by virtue of The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 12(b)(ii)
F60Words in reg. 12(2)(a) substituted (28.5.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1996 (S.I. 1996/1229), regs. 1, 7(b)(i)
F61Reg. 12(2)(b) substituted (28.5.1996) by The Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1996 (S.I. 1996/1229), regs. 1, 7(b)(ii)
F62Reg. 12(3) omitted (9.12.1997) by virtue of The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1997 (S.I. 1997/2706), regs. 1, 2(b)
Commencement Information
F6313. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F63Reg. 13 omitted (6.11.1996) by virtue of The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 13
14.—(1) An overseas dividend manufacturer or an approved United Kingdom collecting agent shall maintain a record in respect of any manufactured overseas dividend paid by him to which this regulation applies showing–
(a)the date of payment and the amount of the manufactured overseas dividend,
(b)the name of the person beneficially entitled to the payment, and the territory in which he was resident at the date of payment, and
(c)particulars of the overseas securities and the overseas dividend on those securities to which the manufactured overseas dividend relates.
(2) This regulation applies to any manufactured overseas dividend in respect of which arrangements have been entered into with the Board by an overseas dividend manufacturer or an approved United Kingdom collecting agent under the Double Taxation Relief Regulations enabling him to make the payment without deduction of tax.
(3) An overseas dividend manufacturer or an approved United Kingdom collecting agent shall retain for a period of six years–
(a)any record required to be maintained by him under paragraph (1), and
(b)any certificate under the Double Taxation Relief Regulations received by him,
and, whenever required to do so within that period, shall make any such record or certificate available for inspection by an officer of the Board.
(4) Where an overseas dividend manufacturer or an approved United Kingdom collecting agent fails to maintain, or to retain for the requisite period, any such record, or fails to retain any such certificate for the requisite period, the Board may require that person to carry out, at his own expense, an audit of manufactured overseas dividends paid by him in order to ascertain the amount of tax, if any, liable to be deducted under paragraph 4(2) of Schedule 23A which was not deducted.
(5) The scope and method of the audit referred to in paragraph (4) shall be agreed between the Board and the person concerned or, in the absence of agreement, shall be determined by the Board.
15.—(1) Subject to paragraphs (2) and (3), where an overseas dividend manufacturer makes a payment of a manufactured overseas dividend from which an amount is deducted by him under paragraph 4(2) of Schedule 23A F64..., he shall furnish the recipient of the payment with a voucher showing the details specified in paragraph (4).
(2) F65... Paragraph (1) shall not apply in any case where, pursuant to paragraph (2), (3)(c) or (4)(c) of regulation 10, a voucher is forwarded to the recipient of a manufactured overseas dividend.
(3) Where the overseas dividend manufacturer is an approved United Kingdom intermediary, he shall not be required to furnish the recipient of a payment with the voucher referred to in paragraph (1) unless the recipient requests such a voucher.
(4) The details specified in this paragraph are that the voucher shall show–
(a)the gross amount of the payment,
(b)the amount deducted or, where more than one amount has been deducted, each such amount separately, and
(c)the actual amount paid.
(5) An approved United Kingdom collecting agent, where requested to do so by the person beneficially entitled to a manufactured overseas dividend in respect of which tax has been paid or is due to be paid by the approved United Kingdom collecting agent under paragraph 4(3) of Schedule 23A or regulation 4(3), shall furnish that person with a voucher showing–
(a)the gross amount of the manufactured overseas dividend received by him,
(b)the amount of tax paid or due to be paid by him in respect of the manufactured overseas dividend, and
(c)the actual amount paid.
Textual Amendments
F64Words in reg. 15(1) omitted (6.11.1996) by virtue of The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 14(a)
F65Words in reg. 15(2) omitted (6.11.1996) by virtue of The Income Tax (Manufactured Overseas Dividends) (Amendment No. 2) Regulations 1996 (S.I. 1996/2643), regs. 1, 14(b)
Commencement Information
F6616. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
Tim Kirkhope
Tim Wood
Two of the Lords Commissioners of Her Majesty’s Treasury
9th August 1993
(This note is not part of the Regulations)
These Regulations, which come into force on 1st October 1993, are made under provisions in Schedule 23A to the Income and Corporation Taxes Act 1988 (“Schedule 23A”). Schedule 23A was inserted by section 58 of, and Schedule 13 to, the Finance Act 1991. The Regulations contain provisions which apply to manufactured overseas dividends in respect of overseas securities as those terms are defined in Schedule 23A.
Regulation 1 provides for citation and commencement, and regulation 2 contains definitions.
Regulation 3 prescribes the rates of relevant withholding tax which are to apply in relation to manufactured overseas dividends.
Regulation 4 provides that in certain circumstances approved manufactured overseas dividends paid to approved United Kingdom intermediaries or approved United Kingdom collecting agents may be paid without deduction of tax but that, subject to certain exceptions, such persons shall account for tax on those manufactured overseas dividends received by them.
Regulation 5 provides that manufactured overseas dividends paid by approved United Kingdom intermediaries to persons beneficially entitled who are resident outside the United Kingdom may be paid without deduction of tax in certain circumstances.
Regulation 6 provides for the retention and keeping of records of notices given under regulation 4 or 5, and enables the Board of Inland Revenue (“the Board”) to require an issuer of such notices who fails to keep records of them to carry out an audit of manufactured overseas dividends received by him and to account for any tax which should have been deducted from such manufactured overseas dividends under paragraph 4(2) of Schedule 23A.
Regulation 7 provides that in certain circumstances a recipient resident in the United Kingdom of manufactured overseas dividends paid by a person not resident in the United Kingdom need not account for tax in respect of the dividends as required by paragraph 4(3) of Schedule 23A, but that he may be required by the Board to carry out an audit of such dividends received by him and to account for any tax due under paragraph 4(3) if he fails to keep records of dividends received or paid by him.
Regulation 8 provides that a manufactured overseas dividend to which regulation 4, 5 or 7 applies shall be treated in relation to the recipient of the payment as if it were an overseas dividend.
Regulation 9 provides that an approved United Kingdom intermediary shall be entitled to set off tax on overseas dividends and manufactured overseas dividends received by him in any chargeable period against tax on approved manufactured overseas dividends paid by him in that period and to account to the Board for, or as the case may be, claim credit in respect of, the balance, except that the entitlement to set off does not apply in the case of certain overseas dividends and manufactured overseas dividends which can be matched against, or identified with, each other under regulation 10.
Regulation 10 sets out the rules for determining whether overseas dividends and manufactured overseas dividends fall to be matched against each other, and provides for the forwarding of tax vouchers relating to overseas dividends matched against manufactured overseas dividends.
Regulation 11 makes provision for the payment of tax pursuant to paragraph 4(2) or (3) of Schedule 23A, or under these Regulations, and provides for the making of returns, and for the assessment and recovery of tax due.
Regulations 12 and 13 provide for the tax treatment of manufactured overseas dividends which are representative of foreign dividends, interest on quoted Eurobonds, or overseas public revenue dividends, and for accounting for tax in respect of such manufactured overseas dividends.
Regulation 14 provides for the keeping of records by overseas dividend manufacturers and approved United Kingdom collecting agents in respect of certain manufactured overseas dividends paid without deduction of tax, and for the carrying out of an audit of such manufactured overseas dividends in the event of a failure to keep records as required.
Regulation 15 provides for the furnishing of vouchers by overseas dividend manufacturers and approved United Kingdom collecting agents to the recipients of manufactured overseas dividends which are paid under deduction of tax or in respect of which tax has been accounted for and paid.
Regulation 16 applies with modifications the information powers conferred on the Board by section 21 of the Taxes Management Act 1970 to businesses carried on by approved United Kingdom intermediaries and approved United Kingdom collecting agents.
See the definitions of “dividend manufacturing regulations” and “prescribed”.
1988 c. 1. Schedule 23A was inserted by section 58(2) of, and paragraph 1 of Schedule 13 to, the Finance Act 1991 (c. 31), and was brought into effect, so far as it relates to manufactured dividends on United Kingdom equities, on 26th February 1992 by S.I. 1992/173 (C.3); so far as it relates to manufactured interest on United Kingdom securities, on 30th June 1992 by S.I. 1992/1346 (C.44); and so far as it relates to manufactured overseas dividends on overseas securities, on 21st April 1993 by S.I. 1993/933 (C.17).
S.I. 1993/1957.
Section 36 was substituted by section 149(1) of the Finance Act 1989 (c. 26), and the section as substituted was amended by paragraph 4(1) of Schedule 11 to the Finance Act 1990 (c. 29), and paragraph 9(2) of Schedule 5 to the Finance (No. 2) Act 1992.
Section 31 was amended by paragraph 3(1) of Schedule 22 to the Finance Act 1984 (c. 43), paragraph 32 of Schedule 29 to the Income and Corporation Taxes Act 1988, Part V of Schedule 17 to the Finance Act 1989, paragraph 14 of Schedule 14 to the Finance Act 1990 and paragraph 2(7) of Schedule 10 to the Taxation of Chargeable Gains Act 1992 (c. 12).
Section 87 was substituted by paragraph 10 of Schedule 24 to the Finance Act 1972 (c. 41), and subsections (1), (7) and (8) of that section as substituted were amended by section 46(3)(b) of the Finance (No. 2) Act 1975 (c. 45), paragraph 32 of Schedule 29 to the Income and Corporation Taxes Act 1988 and section 179(1)(b) of the Finance Act 1989.
Section 98 was amended by paragraph 9 of Schedule 29 to the Income and Corporation Taxes Act 1988, section 164 of the Finance Act 1989 and section 68(3) of the Finance Act 1990.