Explanatory Note
(This note is not part of the Regulations)
These Regulations amend the Income Tax (Manufactured Overseas Dividends) Regulations 1993 (S.I. 1993/2004) (“the principal Regulations”).
The amendments are made in consequence of two sets of provisions in the Finance Act 1996 (c. 8). The first set consists of the provisions relating to corporate loan relationships in Chapter II of Part IV of the 1996 Act, which supersede or repeal a number of the provisions of Schedule 23A to the Income and Corporation Taxes Act 1988 relating to manufactured payments other than manufactured dividends. The second set consists of the provisions relating to paying and collecting agents in Schedule 29 to the 1996 Act (“Schedule 29”). The amendments also extend the information powers conferred on the Board of Inland Revenue by section 21 of the Taxes Management Act 1970 (“the Management Act”) to all overseas dividend manufacturers.
Regulation 1 provides for citation and commencement, and regulation 2 for interpretation.
Regulation 3(a), (b)(ii), (c), and (d), and regulations 4 to 6 amend the principal Regulations so as to take account of the new provisions relating to corporate loan relationships, in particular by removing the distinction between approved and unapproved manufactured overseas dividends from the principal Regulations.
Regulations 3(b)(i), 7 and 8 amend the principal Regulations so as to apply the new provisions in Schedule 29, so far as they relate to collecting agents, to income tax required to be deducted by approved United Kingdom collecting agents and approved United Kingdom intermediaries in respect of manufactured overseas dividends that are representative of foreign dividends.
Regulation 9 substitutes a new regulation 16 of the principal Regulations so as to apply the provisions of section 21 of the Management Act to all overseas dividend manufacturers.