4(1)Section 574 (allowable deductions for manufactured dividends on UK shares: matching) is amended as follows.
(2)In subsection (2), for the words after “allowable” substitute “for income tax purposes as a deduction in calculating the net income of the payer (see Step 2 of the calculation in section 23).
This is subject to subsection (3).”
(3)For subsections (3) to (9) substitute—
“(3)It is—
(a)deductible by virtue of subsection (2) only so far as it is not otherwise deductible and so far as section 263D of TCGA 1992 does not apply, and
(b)not deductible (whether by virtue of subsection (2) or otherwise) if it (or any part of it) is made directly or indirectly in consequence of, or otherwise in connection with, avoidance arrangements.”
(4)In subsection (10), for “deductible if” substitute “otherwise deductible if, apart from this section,”.
(5)In the heading, omit “: matching”.