Search Legislation

Finance Act 2004

What Version

 Help about what version

Advanced Features

 Help about advanced features

Changes over time for: SCHEDULE 24

 Help about opening options

Alternative versions:

Changes to legislation:

There are outstanding changes not yet made by the legislation.gov.uk editorial team to Finance Act 2004. Any changes that have already been made by the team appear in the content and are referenced with annotations. Help about Changes to Legislation

Close

Changes to Legislation

Revised legislation carried on this site may not be fully up to date. Changes and effects are recorded by our editorial team in lists which can be found in the ‘Changes to Legislation’ area. Where those effects have yet to be applied to the text of the legislation by the editorial team they are also listed alongside the legislation in the affected provisions. Use the ‘more’ link to open the changes and effects relevant to the provision you are viewing.

Changes and effects yet to be applied to :

 Help about changes and effects
Close

Changes and effects

This section lists the changes and effects yet to be applied to the specific provision you are viewing.

Changes and effects yet to be applied to the whole Act associated Parts and Chapters:

 Help about changes and effects
Close

Changes and effects

This section lists the changes and effects yet to be applied to the whole Act, associated Parts and Chapters where applicable. This includes any insertions of whole new Parts, Chapters or provisions yet to be inserted into this Act. These effects are included in this view as they may be (but won’t necessarily be) relevant to the specific provision that you are viewing.

Whole provisions yet to be inserted into this Act (including any effects on those provisions):

Commencement Orders yet to be applied to the Finance Act 2004

 Help about changes and effects
Close

Commencement Orders

This section lists the commencement orders yet to be applied to the whole Act. These effects are included in this view as they may be (but won’t necessarily be) relevant to the specific provision that you are viewing. Where applicable the commencement orders are listed under two headings, firstly those that bring some part of the Act you are viewing into force and secondly, those that bring into force legislation that affects some part of the legislation you are viewing. If you are viewing a prospective version or there is a prospective version available there may be commencement orders listed here that are relevant to the provision you are viewing.

Commencement Orders bringing legislation that affects this Act into force:

Section 136

SCHEDULE 24E+W+S+N.I.Manufactured dividends

Amendments of sections 231AA, 231AB and 233 of the Taxes Act 1988E+W+S+N.I.

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—E+W+S+N.I.

(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.

Amendments of paragraph 2A of Schedule 23A to the Taxes Act 1988E+W+S+N.I.

2(1)In Schedule 23A to the Taxes Act 1988 (manufactured dividends and interest) paragraph 2A (deductibility of manufactured payment in the case of the manufacturer) is amended as follows.E+W+S+N.I.

(2)For sub-paragraph (1) (amount of manufactured dividend paid allowable as deduction against total income, subject to sub-paragraph (1A)) substitute—

(1)Where, in the case of a manufactured dividend, the dividend manufacturer is resident in the United Kingdom but is not a company, an amount (“the relevant amount”) equal to the lesser of—

(a)the amount of the manufactured dividend paid (so far as it is not otherwise deductible), and

(b)the amount of the dividend of which the manufactured dividend is representative,

shall be allowable as a deduction for the purposes of income tax only under sub-paragraph (1ZA) or (1A) below..

(3)After sub-paragraph (1) insert—

((1ZA))The relevant amount shall be allowable under this sub-paragraph as a deduction for the purposes of income tax to the extent that the dividend manufacturer—

(a)receives the dividend on the equities which is represented by the manufactured dividend or receives a payment which is representative of that dividend, and

(b)is chargeable to income tax on the dividend or other payment so received;

and that deduction shall be made against the amount of the dividend or other payment so received on which the dividend manufacturer is chargeable to income tax.

((1ZB))Sub-paragraph (1ZA) above shall apply only if the amount of the dividend or other payment so received is received by the dividend manufacturer in—

(a)the year of assessment in which he pays the manufactured dividend, or

(b)the year of assessment immediately before, or immediately after, that year..

(4)In sub-paragraph (1A) (circumstances in which amount of manufactured dividend paid is allowable as deduction against total income)—

(a)in the opening words, for the words from “An amount shall” to “only” substitute “The relevant amount shall be allowable under this sub-paragraph as a deduction for the purposes of income tax against the total income of the dividend manufacturer”,

(b)omit paragraph (a),

(c)omit paragraph (c) and the word “or” before it, and

(d)omit the words following paragraph (c).

(5)In sub-paragraph (1B) (no double deduction allowed)—

(a)for “sub-paragraph (1)” (in both places) substitute “sub-paragraph (1ZA) or (1A)”,

(b)in paragraph (a), for “paragraph (a) of sub-paragraph (1A)” substitute “sub-paragraph (1ZA)” and at the end insert “, or”,

(c)in paragraph (b), for “paragraph (b) of that sub-paragraph” substitute “sub-paragraph (1A) above”,

(d)omit paragraph (c) and the word “or” before it, and

(e)for “, other payment or chargeable gain” (in both places) substitute “or other payment”.

(6)In sub-paragraph (4) (meaning of “deductible”)—

(a)in paragraph (a), omit “or corporation tax”, and

(b)in paragraph (b), omit “or, as the case may be, total profits”.

(7)Subject to sub-paragraph (10), the amendments made by sub-paragraphs (3), (4)(b) and (5)(b) (and the amendments made by sub-paragraphs (2) and (5)(a) so far as relating to those amendments) have effect in relation to a manufactured dividend paid, or treated as paid, by a dividend manufacturer on or after the commencement date where the dividend or other payment of which that manufactured dividend is representative is or was received by him on or after that date.

(8)In sub-paragraph (7) “the commencement date” means—

(a)if the dividend manufacturer is an individual, 6th November 2003;

(b)if the dividend manufacturer is not an individual, 17th March 2004.

(9)Subject to sub-paragraph (10), the amendments made by sub-paragraphs (4)(a) and (5)(c) (and the amendments made by sub-paragraphs (2) and (5)(a) so far as relating to those amendments) have effect in relation to a manufactured dividend paid, or treated as paid, by a dividend manufacturer on or after 17th March 2004.

(10)In relation to a manufactured dividend paid, or treated as paid, by a dividend manufacturer before the day on which this Act is passed, the sub-paragraph (1) of paragraph 2A of Schedule 23A to the Taxes Act 1988 substituted by sub-paragraph (2) of this paragraph shall have effect with the omission of—

(a)the words “the lesser of”, and

(b)paragraph (b) and the word “and” before it.

(11)The amendments made by sub-paragraphs (4)(c) and (d) and (5)(d) and (e) have effect in relation to cases where—

(a)the manufactured dividend is or was paid, or treated as paid, by the dividend manufacturer on or after 17th March 2004, or

(b)the chargeable gain accrues or accrued to the dividend manufacturer on or after that date.

Amendment of the Taxation of Chargeable Gains Act 1992E+W+S+N.I.

3(1)After section 263C of the Taxation of Chargeable Gains Act 1992 (c. 12) insert—E+W+S+N.I.

263DGains accruing to persons paying manufactured dividends

(1)This section applies where one of the following conditions is satisfied in relation to a person who—

(a)is resident in the United Kingdom, but

(b)is not a company.

(2)Condition 1 is that—

(a)the person is the interim holder under a repurchase agreement,

(b)he disposes of any United Kingdom equities transferred to him under that agreement,

(c)a chargeable gain accrues to him on that disposal, and

(d)under that agreement, he pays a manufactured dividend which is representative of a dividend on those United Kingdom equities.

(3)Condition 2 is that—

(a)the person is the borrower under a stock lending arrangement,

(b)he disposes of any United Kingdom equities transferred to him under that arrangement,

(c)a chargeable gain accrues to him on that disposal, and

(d)under that arrangement, he pays a manufactured dividend which is representative of a dividend on those United Kingdom equities.

(4)Condition 3 is that—

(a)the person is a party to a contract or other arrangements for the transfer of United Kingdom equities which is neither a repurchase agreement nor a stock lending arrangement (“the short sale transaction”),

(b)he disposes of the United Kingdom equities under the short sale transaction,

(c)a chargeable gain accrues to him on that disposal, and

(d)under that transaction, he pays a manufactured dividend which is representative of a dividend on those United Kingdom equities.

(5)For the purposes of capital gains tax, a loss shall be treated as accruing to the person on the date on which the chargeable gain mentioned in Condition 1, 2 or 3 accrued to him.

(6)The amount of that loss shall be equal to the lesser of—

(a)the amount of that chargeable gain, and

(b)the adjusted amount.

(7)In subsection (6) above “the adjusted amount” means—

where—

A is the lesser of—

  • (a) the amount of the manufactured dividend paid, and

  • (b) the amount of the dividend of which the manufactured dividend is representative; and

B is an amount equal to so much of the manufactured dividend paid as is allowable to the person as a deduction for the purposes of income tax under paragraph 2A of Schedule 23A to the Taxes Act.

(8)But that loss shall not be deductible except from the chargeable gain mentioned in Condition 1, 2 or 3.

(9)For the purposes of this section “manufactured dividend” has the same meaning as in paragraph 2 of Schedule 23A to the Taxes Act; and any reference to a manufactured dividend being paid—

(a)includes a reference to a payment falling by virtue of section 737A(5) of that Act to be treated for the purposes of Schedule 23A as if it were made, but

(b)does not include a reference to a payment falling by virtue of section 736B(2) of that Act to be treated for the purposes of that Schedule as if it were made.

(10)For the purposes of this section the cases where there is a repurchase agreement are the following—

(a)any case falling within subsection (1) of section 730A of the Taxes Act, and

(b)any case which would fall within that subsection if the sale price and the repurchase price were different;

and, in any such case, any reference to the interim holder shall be construed accordingly.

(11)In this section “stock lending arrangement” has the same meaning as in section 263B of this Act; and, in relation to any such arrangement, any reference to the borrower shall be construed accordingly.

(12)In this section “United Kingdom equities” has the meaning given by paragraph 1 (1) of Schedule 23A to the Taxes Act..

(2)In section 737E of the Taxes Act 1988 (power to modify sections 727A, 730A, 730BB and 737A to 737C)—

(a)in subsection (4) (powers to modify also exercisable in relation to section 263A of the Taxation of Chargeable Gains Act 1992) after “263A” insert “or 263D”, and

(b)in subsection (6)(b) (particular power to modify in relation to section 263A of that Act) after “263A” insert “or 263D”.

(3)The amendments made by sub-paragraphs (1) and (2) have effect in relation to cases where—

(a)the manufactured dividend is or was paid, or treated as paid, by the person on or after 17th March 2004, or

(b)the chargeable gain accrues or accrued to the person on or after that date.

Back to top

Options/Help

Print Options

You have chosen to open The Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act as a PDF

The Whole Act you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open the Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open the Whole Act without Schedules

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open Schedules only

The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made):The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Close

See additional information alongside the content

Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.

Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enactedversion that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

Timeline of Changes

This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.

Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources