Finance Act 2004

Amendments of sections 231AA, 231AB and 233 of the Taxes Act 1988 U.K.

1 (1) In section 231AA of the Taxes Act 1988 (no tax credit for borrower under stock lending arrangement or interim holder under repurchase agreement) after subsection (1) insert— U.K.

“(1A) Where subsection (1) above applies to a relevant person in respect of a qualifying distribution, section 233 (1) (certain persons to be treated as having paid income tax at Schedule F ordinary rate on certain distributions etc) shall not apply in relation to that person in respect of that distribution.

In this subsection “relevant person” means a person resident in the United Kingdom, not being a company.”.

(2) In section 231AB of that Act (no tax credit for original owner under repurchase agreement in respect of certain manufactured dividends) after subsection (1) insert—

“(1A) Where subsection (1) above applies to a relevant person in respect of a qualifying distribution, section 233 (1) (certain persons to be treated as having paid income tax at Schedule F ordinary rate on certain distributions etc) shall not apply in relation to that person in respect of that distribution.

In this subsection “relevant person” means a person resident in the United Kingdom, not being a company.”.

(3) In section 233 of that Act (taxation of certain recipients of distributions etc) in subsection (1) (person other than United Kingdom resident company who is not entitled to tax credit on distribution: to be treated as having paid income tax at Schedule F ordinary rate on the distribution etc) at the end insert— “But this subsection is subject to—

section 231AA(1A) (section 233 (1) not to apply to borrower under stock lending arrangement or interim holder under repurchase agreement);

section 231AB(1A) (section 233 (1) not to apply to original owner under repurchase agreement in respect of certain manufactured dividends).”.

(4) The amendment made by sub-paragraph (1) (and the amendment made by sub-paragraph (3) so far as relating to that amendment) have effect in relation to any qualifying distribution received by a relevant person on or after the commencement date where a manufactured dividend representative of that distribution is or was paid, or treated as paid, by him on or after that date.

(5) In sub-paragraph (4) “the commencement date” means—

(a) if the relevant person is an individual, 6th November 2003;

(b) if the relevant person is not an individual, 17th March 2004.

(6) The amendment made by sub-paragraph (2) (and the amendment made by sub-paragraph (3) so far as relating to that amendment) have effect in relation to any qualifying distribution received by a relevant person on or after the day on which this Act is passed.