Finance Act 2008

Part 2 Consequential provision

TMA 1970

7 TMA 1970 is amended as follows.

8 In section 8(1AA)(b) (personal return: amount payable by way of income tax), after “397(1)” insert “or 397A(2)”.

9 In section 8A(1AA)(b) (trustee’s return: amount payable by way of income tax), after “397(1)” insert “or 397A(2)”.

10 In section 9(1)(b) (self-assessment of amount payable by way of income tax), after “397(1)” insert “or 397A(2)”.

11 In section 12AA(1A)(b) (partnership return: amount payable by way of income tax), after “397(1)” insert “or 397A(2)”.

12 In section 12AB(5) (partnership statement), in the definition of “tax credit”, after “397(1)” insert “or 397A(2)”.

13 In section 59A(8)(b) (payments on account of income tax), after “397(1)” insert “or 397A(2)”.

14 In section 59B(2)(b) (payment of income tax), after “397(1)” insert “or 397A(2)”.

ICTA

15 In section 824(4A)(b) of ICTA (repayment supplements: individuals and others), after “397(1)” insert “or 397A(2)”.

FA 1993

16 In section 171(2B) of FA 1993 (Lloyd’s underwriters etc: taxation of profits and allowance of losses), for “Section 397(1)” substitute “Sections 397(1) and 397A(2)”.

ITTOIA 2005

17 ITTOIA 2005 is amended as follows.

18 In section 403(1) (dividends from non-UK resident companies: income charged), omit “full”.

19 In section 406 (dividends of non-UK resident companies: later charge where cash dividends retained in SIPs are paid over), after subsection (4) insert—

“(4A) For the purposes of determining—

(a) whether the participant is entitled to a tax credit under section 397A in respect of a cash dividend so charged, and

(b) the amount of that tax credit,

that section applies as it has effect for the tax year in which the cash dividend is paid over.”

20 In section 407 (dividends of non-UK resident companies: dividend payment when dividend shares cease to be subject to SIP), after subsection (4) insert—

“(4A) For the purposes of determining—

(a) whether the participant is entitled to a tax credit under section 397A in respect of a dividend so charged, and

(b) the amount of that tax credit,

that section applies as it has effect for the tax year in which the shares cease to be subject to the plan.”

21 In section 408 (reduction in tax due in cases within section 407), after subsection (2) insert—

“(2A) In subsection (2) “the tax due” means the amount of tax due as a result of section 407 after deduction of the tax credit determined in accordance with section 407(4A).”

22 In section 688(1) (income not otherwise charged), omit “full”.

ITA 2007

23 ITA 2007 is amended as follows.

24 In section 425(5) (gift aid: deductions when calculating total amount of income tax to which individual charged for a tax year)—

(a) in paragraph (a), omit “and” at the end of sub-paragraph (v), and

(b) insert at the end “, and

(c) the amount of any tax credit under section 397A of ITTOIA 2005 (tax credits for distributions of non-UK resident companies: UK residents and eligible non-UK residents).”

25 In section 504(4)(b) (provisions that do not apply to income of unauthorised unit trusts), for “section 397(1)” substitute “sections 397(1) and 397A(2)”.

26 (1) Section 567 (meaning of “overseas securities” etc) is amended as follows.

(2) After subsection (1) insert—

“(1A) “Overseas shares” means shares in a non-UK resident company.”

(3) After subsection (2) insert—

“(2A) “Overseas securities” includes overseas shares.”

(4) Accordingly, in the heading, after “of” insert ““overseas shares”,”.

27 (1) Section 592 (no tax credits for borrower under stock lending arrangement) is amended as follows.

(2) In subsection (1)—

(a) in paragraph (a), insert at the end “or overseas shares,”,

(b) in paragraph (c), omit “UK”, and

(c) in paragraph (d)—

(i) after “manufactured dividend” insert “or manufactured overseas dividend”, and

(ii) after “UK shares” insert “or overseas shares”.

(3) In subsection (2), after “397(1)” insert “or 397A(2)”.

28 (1) Section 593 (no tax credits for interim holder under repo) is amended as follows.

(2) In subsection (1)—

(a) in paragraph (a), after “UK shares” insert “or overseas shares”,

(b) in paragraphs (b) and (d), omit “UK”, and

(c) in paragraph (e)—

(i) after “manufactured dividend” insert “or manufactured overseas dividend”, and

(ii) after “UK shares” insert “or overseas shares”.

(3) In subsection (2), after “397(1)” insert “or 397A(2)”.

29 (1) Section 594 (no tax credits for original owner under repo) is amended as follows.

(2) In subsection (1)—

(a) in paragraph (a), after “UK shares” insert “or overseas shares”,

(b) in paragraph (b), omit “UK”,

(c) in paragraph (d)—

(i) after “manufactured dividend” insert “or manufactured overseas dividend”, and

(ii) omit “UK”, and

(d) in paragraph (e), after “manufactured dividend” insert “or manufactured overseas dividend”.

(3) In subsection (2), after “397(1)” insert “or 397A(2)”.

30 (1) Section 595 (meaning of “manufactured dividend”) is amended as follows.

(2) For “has” substitute “and “manufactured overseas dividend” have”.

(3) For “section 573(1)(a)” substitute “sections 573(1)(a) and 581(1)(a)”.

31 In section 989 (definitions), in the definition of “tax credit”, after “397(1)” insert “or 397A(2)”.