[F1Tax treated as deducted from a dividend distributionU.K.
48B.—(1) The tax treated as deducted under regulation 48(2)(b) (“the deemed deduction”) is treated as income tax.
(2) But paragraph (1) does not apply to any foreign element of the deemed deduction.
(3) Instead, for the purposes of the Tax Acts the foreign element of the deemed deduction is treated as if it were tax—
(a)payable under the law of a territory outside the United Kingdom with which there are not in force any arrangements under section 2(1) of TIOPA 2010 (double taxation relief by agreement),
(b)calculated by reference to income arising or any chargeable gain accruing, in the territory, and
(c)corresponding to United Kingdom corporation tax.
(4) The amount of the foreign element of the deemed deduction is the amount, if any, by which the participant’s portion of the legal owner’s liability to corporation tax in respect of the gross income is reduced by any relief which is given, or falls to be given by way of a credit under section 18 of TIOPA 2010 (entitlement to credit for foreign tax reduces UK tax by amount of the credit).
(5) For the purposes of paragraph (4) the participant’s portion shall be determined by reference to the proportions in which participants have rights in the authorised investment fund in the distribution period in question.]
Textual Amendments
F1Regs. 48A, 48B inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Authorised Investment Funds (Tax) (Amendment No. 2) Regulations 2010 (S.I. 2010/1642), regs. 1(1), 5