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Finance Act 1960

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This is the original version (as it was originally enacted).

27Sale of securities cum-dividend

(1)Subject to the provisions of this section, where—

(a)under a contract for the sale of securities the seller is required to pay to the purchaser the amount of a periodical payment of interest on the securities, and

(b)the seller does not satisfy the following condition, that is to say that he is entitled to that payment of interest either as the registered holder of the securities or from a person from whom the seller purchased them,

subsections (2) and (3) of section one hundred and seventy of the Act of 1952 shall apply as if the payment by the seller were an annual payment made, after due deduction of tax, wholly out of a source other than profits or gains brought into charge to tax.

(2)The foregoing subsection shall not apply where the interest in question is payable without deduction of tax or where, under the rules of the stock exchange governing the transaction, the payment required to be made in respect of the interest is of the amount of the interest before deduction of tax.

(3)If for any year of assessment the liability to income tax of a jobber or dealing broker is determined on the footing that any excess of his payments in respect of interest on securities over his receipts in respect thereof, being payments made or receipts accrued in pursuance of a contract for the sale or purchase of the securities, is to be treated for all the purposes of the Income Tax Acts as an annual payment made by him, then as respects that year subsection (1) of this section shall not apply to him if he sold the securities in the ordinary course of his business as a jobber or dealing broker.

(4)Where the seller is resident in the United Kingdom and purchased the securities (otherwise than through a broker) from a person not so resident, then except where the contract for that purchase was made before the seventh day of July, nineteen hundred and sixty, paragraph (b) of subsection (1) of this section shall have effect as if after the word " say " there were inserted the word

either

and as if for the words from " either as" to the end of the paragraph there were inserted the words

as the registered holder of the securities or that he shows to the satisfaction of the Special Commissioners that he acquired the securities, directly or indirectly, from a person who was so entitled to the payment.

(5)Where the seller under such a contract as is mentioned in paragraph (a) of subsection (1) of this section is not resident in the United Kingdom, and the sale is effected through a broker, that subsection shall not apply but, except where the contract was made before the seventh day of July, nineteen hundred and sixty, unless the broker shows to the satisfaction of the Special Commissioners either that the seller was entitled to the payment of interest as the registered holder of the securities or that the seller acquired the securities, directly or indirectly, from a person who was so entitled to the payment, subsections (2) and (3) of section one hundred and seventy of the Act of 1952 shall apply as if the payment through the broker of the amount of the payment of interest were an annual payment by the broker made, after due deduction of tax, wholly out of such a source as is mentioned in the said subsection (1).

(6)In section three hundred and forty-five of the Act of 1952 (amounts assessed under section one hundred and seventy treated as losses of a trade) at the end of subsection (2) (which excludes certain payments from the operation of the section) there shall be added— or

(e)any payment to which the said section one hundred and seventy applies by virtue of section twenty-seven of the Finance Act, 1960.

(7)In this section—

  • " broker " means a member of a stock exchange in the United Kingdom other than a jobber ;

  • " dealing broker", in relation to any sale of securities, means a member of a stock exchange in the United Kingdom, other than the London Stock Exchange, who is recognised by the committee of his exchange as carrying on the business of a dealer and authorised by them to deal in those securities; and

  • " jobber " means a member of the London Stock Exchange who is recognised by the committee thereof as carrying on the business of a jobber; and references to a periodical payment of interest include references to a dividend.

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