Income Tax Act 2007

573 Manufactured dividends on UK shares

(1) This section applies if a person—

(a) pays another person an amount (a “manufactured dividend”) which is representative of a dividend on UK shares, and

(b) does so under a requirement of an arrangement between them for the transfer of the shares.

(2) The Income Tax Acts apply in relation to the recipient, and persons claiming title through or under the recipient, as if the manufactured dividend were a dividend on the shares.

(3) If the payer is a UK resident company, the Income Tax Acts apply in relation to the payer as if the manufactured dividend were a dividend of the company.

(4) If the payer is UK resident and is not a company, the Income Tax Acts apply in relation to the payer subject to sections 574 and 575 (allowable deductions).

(5) This section is subject to—

(a) section 576 (manufactured dividends on UK shares: Real Estate Investment Trusts),

(b) section 583 (manufactured payments exceeding underlying payments), and

(c) section 585 (power to deal with other special cases).