Income Tax Act 2007 (c. 3)

Part 11 U.K. Manufactured payments and repos

Chapter 2 U.K. Manufactured payments

Manufactured dividends on UK shares U.K.

574 Allowable deductionsF1 ... U.K.

(1) This section applies if a person who pays a manufactured dividend as mentioned in section 573(1) is UK resident and is not a company.

(2) An amount equal to the lesser of—

(a) the amount of the manufactured dividend, and

(b) the amount of the dividend of which the manufactured dividend is representative,

is allowable [F2 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).]

[F3 (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.]

(10) For the purposes of subsection (3)(a) an amount is [F4 otherwise deductible if, apart from this section,] it is—

(a) deductible in calculating any of the payer's profits or gains for income tax purposes, or

(b) deductible for those purposes in calculating the net income of the payer.

Textual Amendments

F1 Word in s. 574 heading omitted (21.7.2008 with effect in accordance with s. 63(2) of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 23 para. 4(5)

F2 Words in s. 574(2) substituted (21.7.2008 with effect in accordance with s. 63(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 23 para. 4(2)

F3 S. 574(3) substituted (21.7.2008 with effect in accordance with s. 63(2) of the amending Act) for s. 574(3)-(9) by Finance Act 2008 (c. 9), Sch. 23 para. 4(3)

F4 Words in s. 574(10) substituted (21.7.2008 with effect in accordance with s. 63(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 23 para. 4(4)