Explanatory Note
(This note is not part of the Regulations)
These Regulations amend the Income Tax (Manufactured Overseas Dividends) Regulations 1993 (S.I. 1993/2004) (“the principal Regulations”).
Regulation 1 provides for citation and commencement, and regulation 2 for interpretation.
Regulation 3 amends the definition of “chargeable period” in regulation 2A of the principal Regulations (inserted by regulation 4 of S.I. 1995/1324).
Regulation 4 excepts from regulation 4 of the principal Regulations (tax treatment of manufactured overseas dividends paid to approved United Kingdom intermediaries or approved United Kingdom collecting agents) cases where the overseas dividend manufacturer receives a real overseas dividend and then pays a manufactured overseas dividend representative of that overseas dividend.
Regulation 5 amends regulation 7 of the principal Regulations (disapplication of paragraph 4(3) of Schedule 23A to the Income and Corporation Taxes Act 1988) (“the Taxes Act”) so as to provide that, in cases where the non-resident overseas dividend manufacturer is entitled to payment of the overseas dividend of which the manufactured overseas dividend paid by him is representative, the recipient of the manufactured overseas dividend is treated for the purposes of the Tax Acts as receiving a real dividend in the amount of that overseas dividend after deduction of overseas tax.
Regulation 6 amends regulation 9 of the principal Regulations (offsetting of tax by overseas dividend manufacturers who are approved United Kingdom intermediaries). Regulation 9(4A) (inserted by S.I. 1995/1324) provides that double taxation relief may not be claimed where overseas dividends or manufactured overseas dividends received by the overseas dividend manufacturer in a chargeable period are matched, in accordance with regulation 10, against manufactured overseas dividends paid by him in that period. The amendment made allows, by way of an exception, relief under section 811 of the Taxes Act to be given where overseas dividends or manufactured overseas dividends received by the overseas dividend manufacturer are matched against manufactured overseas dividends paid by him without deduction of tax under regulation 5 of the principal Regulations.
Regulation 7 inserts a new regulation (9A) in the principal Regulations enabling an overseas dividend manufacturer who is not an approved United Kingdom intermediary to offset overseas tax on overseas dividends received by him in a chargeable period against manufactured overseas dividends paid by him in that period that are representative of those overseas dividends.
Regulation 8 amends regulation 10 of the principal Regulations (matching of dividends and manufactured overseas dividends) so as to ensure that regulation 10(1)(a) refers to regulation 9(1A) of the principal Regulations in connection with tax attributable to manufactured overseas dividends received by an overseas dividend manufacturer.
Regulation 9 amends regulation 11(2) of the principal Regulations so as to provide in relation to chargeable periods ending after 1st July 1997 that the time limit for the rendering of a return by an overseas dividend manufacturer shall be 30 days from the end of a chargeable period, and not 90 days.