16U.K.ITA 2007 is amended as follows.
17U.K.In section 2 (overview of Act)—
(a)omit subsection (11), and
(b)before subsection (11A) insert—
“(11ZA)Part 11ZA is about manufactured payments.”
18U.K.Omit the following provisions (which deal with manufactured payments and repos)—
(a)sections 565 to 595,
(b)section 596(1) to (4), and
(c)section 606(8).
19U.K.In section 647 (makers of manufactured payments), for subsection (6) substitute—
“(6)In this section “manufactured payments contract” means a contract under which—
(a)the seller is required to pay another person an amount which is representative of a periodical payment of interest on UK securities under an arrangement between them for the transfer of the securities, or
(b)the seller is required to pay another person an amount which is representative of an overseas dividend on overseas securities under an arrangement between them for the transfer of the securities.
(7)In this section—
(a)“overseas securities” means shares, stock or other securities issued by—
(i)a government, local authority or other public authority of a territory outside the United Kingdom, or
(ii)another non-UK resident body of persons,
and includes shares in a non-UK resident company,
(b)“overseas dividend” means any interest, dividend or other annual payment payable in respect of overseas securities, and
(c)“UK securities” means securities of—
(i)the government of the United Kingdom,
(ii)a local authority in the United Kingdom,
(iii)another public authority in the United Kingdom, or
(iv)a UK resident company or other UK resident body,
but does not include shares in a UK resident company.”
20U.K.In section 658 (powers to modify: supplementary), for subsection (5) substitute—
“(5)Subsections (6) to (10) apply for the purposes of sections 656 and 657 and this section.
(6)“UK shares” means shares in a UK resident company.
(7)“UK securities” means securities of—
(a)the government of the United Kingdom,
(b)a local authority in the United Kingdom,
(c)another public authority in the United Kingdom, or
(d)a UK resident company or other UK resident body.
(8)But “UK securities” does not include UK shares.
(9)“Overseas securities” means shares, stock or other securities issued by—
(a)a government, local authority or other public authority of a territory outside the United Kingdom, or
(b)another non-UK resident body of persons.
(10)“Overseas securities” includes shares in a non-UK resident company.”
21U.K.In section 918(1) (manufactured dividends on UK shares: REITs), for paragraph (a) substitute—
“(a)a person pays a manufactured payment as mentioned in section 614ZC(1) and the amount payable is representative of a dividend (a “manufactured dividend”), and”.
22U.K.In section 919 (manufactured interest on UK securities)—
(a)for subsection (1) substitute—
“(1)This section applies if—
(a)a person pays a manufactured payment as mentioned in section 614ZC(1),
(b)the amount payable is representative of interest on UK securities (“manufactured interest”), and
(c)the person —
(i)is UK resident, or
(ii)pays the manufactured interest in the course of a trade carried on in the United Kingdom through a branch or agency.”,
(b)in subsection (4), omit the words from “section 583” to “special cases)”, and
(c)after subsection (5) insert—
“(6)In subsection (1) “UK securities” means securities of—
(a)the government of the United Kingdom,
(b)a local authority in the United Kingdom,
(c)another public authority in the United Kingdom, or
(d)a UK resident company or other UK resident body.
(7)But “UK securities” does not include shares in a UK resident company.
(8)In this section “securities” includes loan stock or any similar security.”
23U.K.Omit section 920 (foreign payers of manufactured interest: the reverse charge).
24U.K.In section 921 (cases where interest on underlying securities paid gross), in subsection (3), for the words from “ “securities”” to the end substitute “ “manufactured interest” has the same meaning as in section 919. ”
25U.K.Omit sections 922 to 925 (manufactured overseas dividends).
26U.K.In section 925A(2) (creditor repos), for “to 925” substitute “ , 919 and 921 ”.
27U.K.Omit section 925B (debtor repos).
28U.K.In section 925C (actual payments ignored)—
(a)in the heading, omit “or 925B”,
(b)omit “or 925B(2)”, and
(c)for “to 925” substitute “ , 919 and 921 ”.
29U.K.In section 926 (interpretation of Chapter 9 of Part 15), omit subsections (1) and (1A).
30U.K.In Schedule 1 (minor and consequential amendments), omit paragraph 335(1) to (4) and (6) to (8).
31U.K.In Schedule 2 (transitionals and savings), omit paragraphs 108 to 111 (and the headings “Part 12”, “Manufactured payments and repos” and “Tax credits: stock lending arrangements and repos” immediately preceding paragraph 108).
32U.K.In Schedule 4 (index of defined expressions), omit the entries for— “ buying back securities, in the context of a repo (in Part 11) ”, “ company UK REIT (in Chapter 2 of Part 11) ”, “ gross amount (in Chapter 2 of Part 11) ”, “ group (in Chapter 2 of Part 11) ”, “ group UK REIT (in Chapter 2 of Part 11) ”, “ manufactured dividend (in Chapter 2 of Part 11) ”, “ manufactured dividend (in Chapter 3 of Part 11) ”, “ manufactured interest (in Chapter 2 of Part 11) ”, “ manufactured overseas dividend (in Chapter 2 of Part 11) ”, “ overseas dividend (in Part 11) ”, “ overseas dividend (in Chapter 9 of Part 15) ”, “ overseas securities (in Part 11) ”, “ overseas tax (in Chapter 2 of Part 11) ”, “ overseas tax (in Chapter 9 of Part 15) ”, “ overseas tax credit (in Chapter 2 of Part 11) ”, “ prescribed (in Chapter 2 of Part 11) ”, “ principal company (in Chapter 2 of Part 11) ”, “ principal company (in Chapter 9 of Part 15) ”, “ property rental business (in Chapter 2 of Part 11) ”, “ property rental business (in Chapter 9 of Part 15) ”, “ related agreements (in Part 11) ”, “ relevant withholding tax (in Chapter 2 of Part 11) ”, “ repo (in Part 11) ”, “ the rules about manufactured payments (in Chapter 4 of Part 11) ”, “ stock lending arrangement (in Part 11) ”, “ trade carried on through a branch or agency (in Chapter 2 of Part 11) ”, “ transfer (in Chapter 2 of Part 11) ”, “ UK securities (in Part 11) ”, and “ UK shares (in Part 11) ”.