Corporation Tax Act 2010 (c. 4)

Part 17 U.K. Manufactured payments and repos

Chapter 4 U.K. Further provision about manufactured payments

Manufactured payments exceeding, or less than, underlying payments U.K.

796 Manufactured dividends: amounts exceeding underlying payments U.K.

(1) This section applies if an amount paid by way of manufactured dividend would otherwise exceed the amount of the dividend of which it is representative.

(2) The payment, to the extent of an amount equal to the excess, is treated for the purposes of Chapter 2 and this Chapter as not made under the requirement mentioned in section 782(b) (meaning of “manufactured dividend”).

(3) Instead it is treated, to that extent, for all purposes of the Corporation Tax Acts as a separate fee for entering into the arrangement under which it was made.

797 Manufactured overseas dividends: amounts exceeding underlying payments U.K.

(1) This section applies if the sum of—

(a) an amount paid by way of manufactured overseas dividend, and

(b) the income tax required to be accounted for and paid in connection with the making of the payment,

would otherwise exceed the gross amount of the overseas dividend of which it is representative.

(2) The payment, to the extent of an amount equal to the excess, is treated for the purposes of Chapter 3 and this Chapter as not made under the requirement mentioned in section 790(b) (meaning of “manufactured overseas dividend”).

(3) Instead it is treated, to that extent, for all purposes of the Corporation Tax Acts as a separate fee for entering into the arrangement under which it was made.

(4) But subsection (3) does not apply so far as Part 5 of CTA 2009 (loan relationships) applies to the amount as if it were interest under a loan relationship as a result of section 540 of that Act.

798 Manufactured overseas dividends less than underlying payments U.K.

(1) This section applies if the sum of—

(a) an amount paid by way of manufactured overseas dividend, and

(b) the income tax required to be accounted for and paid in connection with the making of the payment,

is less than the gross amount of the overseas dividend of which it is representative.

(2) For the purpose of giving relief under the Corporation Tax Acts in a case to which section 792 or 794 applies (manufactured overseas dividends: treatment of recipient), the gross amount of the manufactured overseas dividend is not the amount specified in section 813(2).

(3) Instead it is treated as being an amount equal to the sum of the amounts mentioned in paragraphs (a) and (b) of subsection (1).

(4) In this section “relief” means relief by way of—

(a) deduction in calculating profits or gains, or

(b) deduction from total profits.