Income Tax (Trading and Other Income) Act 2005

Chapter 13 Sales of foreign dividend coupons

570 Charge to tax under Chapter 13

(1) Income tax is charged on income treated under subsection (2) as arising from foreign holdings.

(2) Income is treated as arising from such holdings in the following cases.

(3) The first case is where a bank’s office in the United Kingdom—

(a) pays over the proceeds of a sale or other realisation of dividend coupons in respect of the holdings which has been effected by the bank, or

(b) carries such proceeds into an account.

(4) The second case is where a person who is not a bank or a dealer in coupons sells dividend coupons in respect of the holdings to a person dealing in coupons in the United Kingdom.

(5) In this section “bank” has the meaning given by section 840A of ICTA.

571 Meaning of “foreign holdings” etc.

(1) In this Chapter “foreign holdings” means shares or other securities outside the United Kingdom that are—

(a) securities issued by or on behalf of a government or local or other public authority in a country outside the United Kingdom, or

(b) shares or securities issued by or on behalf of a non-UK resident body of persons.

(2) In section 570 “dividend coupons” means coupons for dividends payable in respect of foreign holdings.

(3) In this Chapter “coupons” includes—

(a) warrants, and

(b) bills of exchange that purport to be drawn or made in payment of dividends payable in respect of foreign holdings.

(4) In this section “dividends”—

(a) in the case of foreign holdings within subsection (1)(a), means interest or annual payments payable out of the revenue of the government or authority, and

(b) in the case of foreign holdings within subsection (1)(b), includes interest or other annual payments.

(5) In subsection (1) “securities” includes loan stock and similar securities.

572 Income charged

(1) In a case within section 570(3), tax is charged under this Chapter on the full amount of the proceeds that are paid over or carried into the account in the tax year.

(2) In a case within section 570(4), tax is charged under this Chapter on the full amount of the proceeds arising in the tax year.

(3) Subsections (1) and (2) are subject to Part 8 (foreign income: special rules).

573 Person liable

The person liable for any tax charged under this Chapter is the person receiving or entitled to the proceeds.