The Income Tax (Manufactured Overseas Dividends) Regulations 1993

Further provision relating to manufactured overseas dividends representative of foreign dividends U.K.

13.—(1) This regulation applies to a case where a manufactured overseas dividend–

(a) is representative of an overseas dividend within regulation 12(1)(a) in respect of which tax would, but for the contract or other arrangements under which the manufactured overseas dividend is paid, have been chargeable under subsection (2) or (3) of section 123 or under section 17(1) of the Taxes Act in respect of the dividend or, as the case may be, in respect of the proceeds of sale or other realisation of any coupon for that dividend; and

(b) is paid by an approved United Kingdom intermediary to or for the benefit of the person entitled to the manufactured overseas dividend and not to an approved United Kingdom collecting agent.

(2) Where this regulation applies–

(a) deduction of an amount determined by reference to the gross amount of the manufactured overseas dividend shall be made by the approved United Kingdom intermediary 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 subsection (2) or (3) of section 123 or under section 17(1) of the Taxes Act, as the case may be;

(b) subject to paragraph (3), the provisions of Parts III and IV of Schedule 3 to the Taxes Act shall apply in relation to amounts falling to be deducted under sub– paragraph (a) as if the modifications to that Schedule specified in paragraphs (i) to (iii) of regulation 12(2)(b) also had effect in relation to manufactured overseas dividends to which this regulation applies and tax falling to be deducted under sub–paragraph (a).

(3) Where the approved United Kingdom intermediary is either a company resident in the United Kingdom or a company which is not resident in the United Kingdom but carries on a trade in the United Kingdom through a branch or agency (in this regulation referred to as “a non–resident company”), the like provisions as are contained in Schedule 16 to the Taxes Act shall have effect for the purpose of accounting for and paying amounts deducted under paragraph (2)(a) above as if–

(a) references to a company included references to a non–resident company, and

(b) in relation to a non–resident company–

(i) paragraph 5 of the Schedule applied only to payments received by that company and falling to be taken into account in computing its profits chargeable to corporation tax, and

(ii) in paragraph 7 of the Schedule the reference to section 7(2) included a reference to sections 11(3) and 349(1) of the Taxes Act.

Commencement Information

I1 Reg. 13 in force at 1.10.1993, see reg. 1