2(1)Section 730 of ICTA (transfers of income arising from securities) is amended as follows.E+W+S+N.I.
(2)In each place where it occurs—
(a)for “interest” substitute “ distribution ”;
(b)for “securities” substitute “ shares ”.
(3)In subsection (1) (interest deemed to be income of owner etc)—
(a)in paragraph (a), for “deemed to be” substitute “ treated as ”,
(b)in paragraph (b), for “deemed to be” substitute “ treated as ”, and
(c)omit paragraph (c).
(4)For subsection (2) (sale etc where proceeds chargeable to tax by virtue of section 18(3B) of ICTA) substitute—
“(2)This section does not have effect in relation to a sale or transfer if the proceeds of the sale or transfer are chargeable to tax.”.
(5)Omit subsection (2A) (loan relationships).
(6)For subsection (3) substitute—
“(3)The proceeds of any subsequent sale or other realisation of the right to receive the distribution shall not, for any of the purposes of the Tax Acts, be regarded as the income of the seller or the person on whose behalf the right is otherwise realised.”.
(7)In subsection (4), in the words following paragraph (b) after their substitution by paragraph 300(3)(b) of Schedule 1 to ITTOIA 2005, for “interest” substitute “ distribution ”.
(8)In subsection (4A), for “interest arising” substitute “ distribution ”.
(9)In subsection (4B), for “interest” substitute “ distribution ”.
(10)For subsection (7) (definitions) substitute—
“(7)In this section—
“distribution”, in relation to shares in a company,—(a)
has the same meaning as it has in the Corporation Tax Acts (see section 209), but(b)
also includes any amount that would be a distribution if the company paying it were resident in the United Kingdom;
“shares” means shares in a company.”.
(11)In subsection (8) (information powers) omit from “and for the purpose” to the end of the subsection.
(12)The heading to the section becomes “ Transfers of rights to receive distributions in respect of shares ”.
(13)The amendments made by this paragraph have effect in relation to sales or transfers on or after 2nd December 2004.