The Income Tax (Manufactured Overseas Dividends) Regulations 1993

Prospective

Tax treatment of manufactured overseas dividends representative of foreign dividendsU.K.

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

(a)is representative of an overseas dividend specified in paragraph (a), (b), (c) or (d) of paragraph 4(8) of Schedule 23A;

(b)is paid to an approved United Kingdom collecting agent in circumstances where, had it been the overseas dividend of which it is representative, tax would have been chargeable under subsection (2) or (3) of section 123 or under section 17(1) of the Taxes Act(1) 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

(c)is not paid to an approved United Kingdom collecting agent whose appointment as such an agent was a condition of the Board’s approval of an arrangement under regulation 7 or 8 of the Income Tax (Stock Lending) Regulations 1989, in circumstances where the overseas dividend of which it is representative would not, in the absence of the arrangement, have been chargeable under subsection (2) or (3) of section 123 or section 17(1) of the Taxes Act.

(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 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 subsection (2) or (3) of section 123 or under section 17(1) of the Taxes Act, as the case may be; and

(b)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–

(i)references in paragraphs 6(1)(c) and (d), 6A, 6C and 6D of that Schedule(2) to dividends, foreign dividends or the sale or other realisation of coupons for dividends, or the proceeds of such sale or realisation, included references to manufactured overseas dividends to which this regulation applies or, as the case may be, the sale or other realisation of manufactured overseas dividends to which this regulation applies;

(ii)references to income tax in paragraph 6A of that Schedule included references to amounts falling to be deducted under sub–paragraph (a) of this paragraph; and

(iii)paragraph 15 of that Schedule applied to an approved United Kingdom collecting agent who obtains payment of any manufactured overseas dividend to which this regulation applies or who would be obliged by virtue of this regulation to pay income tax in respect of the proceeds of sale or other realisation of any such manufactured overseas dividend, as it applies to any person entrusted with the payment of any such interest, dividends or other annual payments as is or are mentioned in sub–paragraph (1) of that paragraph.