Part 15

Deduction of income tax at source
Chapter 9

Manufactured payments

Manufactured dividends

Manufactured dividends on UK shares: Real Estate Investment Trusts
918
1
This section applies if—
a
a person pays a manufactured payment as mentioned in section 614ZC(1) and the amount payable is representative of a dividend (a “manufactured dividend”), and
b
the manufactured dividend is representative of a dividend which is—
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.
2
This section applies only so far as the manufactured dividend is representative of such a dividend.
3
If the payer—
a
is UK resident, or
b
pays the manufactured dividend in the course of a trade carried on through a branch or agency in the United Kingdom,
regulations under section 973 apply to the payer as they apply to a company UK REIT, with any necessary modifications.
3A
But subsection (3) does not apply if—
a
the manufactured dividend is paid by a
UK
resident company in the course of a trade carried on through a permanent establishment in a territory outside the United Kingdom, and
b
section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is paid.
4
The Treasury may by regulations provide, in a case where the payer—
a
is non-UK resident and pays the manufactured dividend otherwise than in the course of a trade carried on through a branch or agency in the United Kingdom, or
b
is a
UK
resident company and pays the manufactured dividend in the course of a trade carried on through a permanent establishment in a territory outside the United Kingdom and section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is paid,
for a United Kingdom recipient of the manufactured dividend to be liable to account for and pay income tax in respect of it.
5
A United Kingdom recipient is a recipient who—
a
is UK resident, or
b
is non-UK resident but receives the manufactured dividend for the purposes of a trade carried on by the recipient through a branch or agency in the United Kingdom.
5A
But a
UK
resident is not a United Kingdom recipient if—
a
it is a
UK
resident company which receives the manufactured dividend for the purposes of a trade carried on by the recipient through a permanent establishment in a territory outside the United Kingdom, and
b
section 18A of CTA 2009 has effect in relation to the company for the accounting period in which it is received.
6
The amount of income tax which the recipient may be liable to account for and pay under regulations under subsection (4) is equal to the amount of the sum representing income tax which the payer would have been required to deduct in accordance with regulations under section 973.
7
For the purposes of—
a
regulations under section 973 as applied by subsection (3), and
b
regulations under subsection (4),
the “gross amount” of a manufactured dividend to which this section applies is equal to the gross amount of the dividend of which it is representative.
8
In subsection (1) “
gains
” includes chargeable gains.
S. 918(1)(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. 555(a) (with Sch. 2)
Words in s. 918(3) 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. 555(b) (with Sch. 2)
Pt. 15 Ch. 9 modified (with effect in accordance with art. 2 of the commencing S.I.) by Finance Act 2007 (c. 11), s. 47(4), Sch. 13 para. 13; S.I. 2007/2483, art. 2
S. 918(8) 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. 555(c) (with Sch. 2)
S. 918(5A) inserted (19.7.2011) by Finance Act 2011 (c. 11), Sch. 13 paras. 20(4), 31
S. 918(1)(a) substituted (1.1.2014) by Finance Act 2013 (c. 29), Sch. 1 para. 52, Sch. 29 para. 21
Pt. 15 modified (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), ss. 551(4), 1329(1) (with Pts. 1, 2, Sch. 2 para. 78)
S. 918(4)(a)(b) substituted (19.7.2011) by Finance Act 2011 (c. 11), Sch. 13 paras. 20(3), 31
S. 918(3A) inserted (19.7.2011) by Finance Act 2011 (c. 11), Sch. 13 paras. 20(2), 31