The Income Tax (Manufactured Overseas Dividends) Regulations 1993

Matching of dividends and manufactured overseas dividends

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 pursuant to notices issued by him under regulation 4(4)(c), 5(2)(b)(iii), or 7(2)(d);

(ii) overseas dividends received; and

(iii) manufactured overseas dividends received from which tax has been deducted under paragraph 4(2) of Schedule 23A or in respect of which tax has been accounted for and paid under paragraph 4(3) of Schedule 23A or regulation 4(3); 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.

(2) Where under paragraph (1) an overseas dividend received is matched with a manufactured overseas dividend paid, any voucher relating to the deduction of overseas tax from the overseas dividend shall, subject to paragraph (3), be forwarded to the recipient of the manufactured overseas dividend.

(3) Where under paragraph (1) an overseas dividend 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 a voucher corresponding to each such manufactured overseas dividend, 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 and showing the following amounts–

(i) so much of the gross amount of the overseas dividend as corresponds to the gross amount of the manufactured overseas dividend,

(ii) so much of the overseas tax in respect of the overseas dividend as would be eligible for relief as mentioned in regulation 9(7) and relates to the amount of the overseas dividend calculated in paragraph (i) above, and

(iii) so much of the actual amount of the overseas dividend received by him as corresponds to the amount of the manufactured overseas dividend paid by him, 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, 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 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.