602Deemed manufactured payments: reposU.K.
(1)If this section applies, the rules about manufactured payments apply as if the person from whom the securities are to be repurchased (“A”)—
(a)were required, under the repo, to pay the repurchaser an amount representative of the distribution, and
(b)discharged the requirement when [F1the distribution was payable].
(2)The amount mentioned in subsection (1)(a) is—
(a)in the case of a dividend on UK shares (other than one within paragraph (b)), the amount of the dividend,
(b)in the case of a dividend on UK shares so far as—
[F2(i)paid by a company UK REIT in respect of profits or gains (or both) of the company’s property rental business, or
(ii)paid by the principal company of a group UK REIT in respect of profits or gains (or both) of property rental business of members of the group,]
the gross amount of the dividend,
(c)in the case of a periodical payment of interest on UK securities, the gross amount of the periodical payment of interest, and
(d)in the case of an overseas dividend on overseas securities, the gross amount of the overseas dividend.
[F3(2A)In subsection (2) “gains” includes chargeable gains.]
(3)But if A is not the person to whom the original owner agreed to sell the securities, A is not entitled (whether as a result of the rules about manufactured payments or otherwise) to an income deduction as a result of subsection (1).
(4)“Income deduction” means—
(a)a deduction in calculating profits or gains for income tax purposes, or
(b)a deduction in calculating net income.
Textual Amendments
F1Words in s. 602(1)(b) substituted (with effect in accordance with art. 3 of the commencing S.I.) by Finance Act 2007 (c. 11), s. 47(4), Sch. 14 para. 22; S.I. 2007/2483, art. 3
F2S. 602(2)(b)(i)(ii) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 541(2) (with Sch. 2)
F3S. 602(2A) inserted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 541(3) (with Sch. 2)
Modifications etc. (not altering text)
C1Ss. 601-610 applied (with modifications) (with effect in accordance with reg. 1(2) of the amending S.I.) by Sale and Repurchase of Securities (Modification of Enactments) Regulations 2007 (S.I. 2007/2486), regs. 1(1), 2(2), 3