Income Tax (Manufactured Overseas Dividends) Regulations 1993
| Jurisdiction | UK Non-devolved |
| Citation | SI 1993/2004 |
| Year | 1993 |
1993No. 2004
INCOME TAX
The Income Tax (Manufactured Overseas Dividends) Regulations
1993
9thAugust1993
9thAugust1993
1stOctober1993
The Treasury, in exercise of the powers conferred on them by paragraphs 1(1) ( a), 4(6) to (8) and 8 of Schedule 23A to the Income and Corporation Taxes Act 1988 ( b), hereby make the following Regulations:-
Citation and commencement
1. These Regulations may be cited as the Income Tax (Manufactured Overseas Dividends) Regulations 1993 and shall come into force on 1st October 1993.
Interpretation
2. In these Regulations unless the context otherwise requires-
"approved manufactured overseas dividend" means any manufactured overseas dividend which is not an unapproved manufactured payment;
"approved United Kingdom collecting agent" means a person who is resident in the United Kingdom or, if not so resident, is carrying on a trade in the United Kingdom through a branch or agency and who, as part of the Board's approval of an arrangement under regulation 7(1)(c) or (2)(c), or regulation 8(1)(e), of the Income Tax (Stock Lending) Regulations 1989 ( c), is approved by the Board as authorised to collect and forward manufactured overseas dividends;
"approved United Kingdom intermediary" means an overseas dividend manufacturer who is resident in the United Kingdom or, if not so resident, is carrying on a trade in the United Kingdom through a branch or agency and who is an approved intermediary within the meaning of regulation 7(3) of the Income Tax (Stock Lending) Regulations 1989;
"the Board" means the Commissioners of Inland Revenue;
"chargeable period" means-
(a) as respects a company, its accounting period for the purposes of corporation tax;(b) as respects any other person, the period which-(i) where the person in question pays a manufactured overseas dividend in a period for which he draws up accounts and at a time prior to the end(a) See the definitions of "dividend manufacturing regulations" and "prescribed".
(b) 1988 c.1. Schedule 23A was inserted by section 58(2) of, and paragraph 1 of Schedule 13 to, the Finance Act 1991 (c.31), and was brought into effect, so far as it relates to manufactured dividends on United Kingdom equities, on 26th February 1992 by S.I. 1992/173 (C.3); so far as it relates to manufactured interest on United Kingdom securities, on 30th June 1992 by S.I. 1992/1346 (C.44); and so far as it relates to manufactured overseas dividends on overseas securities, on 21st April 1993 by S.I. 1993/933 (C.17).
(c) S.I. 1989/1299; relevant amending instruments are S.I. 1990/2552 and 1993/2003.
of a chargeable period, begins at the beginning of that period of account, or(ii) where the person in question pays a manufactured overseas dividend in a period for which he draws up accounts but after the end of a chargeable period which has ended during that period of account, begins immediately following the end of that chargeable period, or(iii) where the person in question pays a manufactured overseas dividend in a period for which he does not draw up accounts, begins on the date of the payment, and(iv) ends at the expiration of 12 months from the beginning of the period, or at the end of the period for which the person in question draws up accounts, or at the end of a period for which he does not draw up accounts, whichever first occurs;"the Double Taxation Relief Regulations" means the Double Taxation Relief (Taxes on Income) (General) (Manufactured Overseas Dividends) Regulations 1993 ( a);
"gross amount of the manufactured overseas dividend" has the meaning given by paragraph 4(5)(b) of Schedule 23A;
"the Income Tax Acts" has the meaning given by section 831(1)(b) of the Taxes Act;
"the Management Act" means the Taxes Management Act 1970 ( b);
"manufactured overseas dividend" shall be construed in accordance with paragraph 4(1) of Schedule 23A;
"overseas dividend", "overseas dividend manufacturer", "overseas securities", "overseas tax" and "overseas tax credit" have the meanings given by paragraph 1(1) of Schedule 23A;
"relevant withholding tax" has the meaning given by paragraph 4(5)(a) of Schedule 23A;
"Schedule 23A" means Schedule 23A to the Taxes Act;
"the Taxes Act" means the Income and Corporation Taxes Act 1988;
"the Tax Acts" has the meaning given by section 831(2) of the Taxes Act;
"unapproved manufactured payment" has the meaning given by paragraph 1(1) of Schedule 23A in so far as that meaning relates to a manufactured overseas dividend;
"United Kingdom recipient" has the meaning given by paragraph 4(3) of Schedule 23A.
Prescribed rates of relevant withholding tax
3.-(1) Subject to paragraph (4), the rate of relevant withholding tax which is prescribed in relation to any manufactured overseas dividend is the rate which is equal to the rate (or, if more than one, the highest rate) at which tax would have been payable (and not repayable) under the law of the overseas territory specified in paragraph (3) in respect of-
(a) an overseas dividend paid on the same date that the manufactured overseas dividend is paid to a person who is-(i) resident in the United Kingdom and not carrying on a trade outside the United Kingdom through a branch or agency,(ii) subject to tax under the law of the United Kingdom, and(iii) not subject to a special relationship with any other person as respects any commercial or financial dealings,in respect of the same kind of overseas securities as those in respect of which the manufactured overseas dividend was paid, and
(b) the overseas tax credit, if any, relating to that overseas dividend.(2) The reference in paragraph (1) above to tax which would have been payable is a reference to tax which would have been eligible for relief either-
(a) S.I. 1993/1957.
(b) 1970 c.9.
(a) pursuant to arrangements made with the government of the overseas territory specified in paragraph (3) which have effect by virtue of section 788 of the Taxes Act and relate to the overseas dividend concerned, or(b) by virtue of other provisions of Part XVIII of the Taxes Act other than section 790(5)(c)(ii) of that Act.(3) The overseas territory specified in this paragraph is the territory of the government or public or local authority which issued the securities in question or, where the securities were issued by any other body of persons not resident in the United Kingdom, the territory under whose law that tax would have been payable.
(4) Where a manufactured overseas dividend is paid-
(a) to or for the benefit of-(i) an individual beneficially entitled to the payment who is resident in a territory outside the United Kingdom, or(ii) a company beneficially entitled to the payment whose central management and control is situated in a territory outside the United Kingdom and which is not resident in the United Kingdom, or(iii) any other body of persons resident in a territory outside the United Kingdom, and(b) in respect of securities issued by the government, or a public or local authority, of that territory or any other body of persons resident in that territory, and(c) in circumstances where arrangements, if any, made between the United Kingdom and the government of that territory which have effect under section 788 of the Taxes Act do not contain an article providing for exemption from United Kingdom tax in respect of the payment as constituting income not expressly mentioned in other articles of the arrangements,the rate prescribed in relation to that manufactured overseas dividend is the rate which is equal to the rate at which tax would have fallen to be deducted under the law of that territory in respect of-
(i) an overseas dividend paid to that recipient in respect of those securities, and(ii) the overseas tax credit, if any, relating to that overseas dividend.Tax treatment of approved manufactured overseas dividends paid to approved United Kingdom intermediaries or approved United Kingdom collecting agents
4.-(1) For the purposes of the provisions of the Tax Acts relating to the charge to tax under Schedule D other than paragraph 4(3) of Schedule 23A, an approved manufactured overseas dividend paid in the circumstances prescribed in paragraph (2)-
(a) shall not be treated as an annual payment pursuant to paragraph 4(2) of Schedule 23A;(b) shall be paid without deduction of an amount on account of income tax;(c) where the maker of the payment is an investment company within the meaning of section 130 of the Taxes Act, shall be treated as if it was an expense of management in relation to that company.(2) The circumstances prescribed by this paragraph are where an approved manufactured overseas dividend is paid to an approved United Kingdom intermediary or an approved United Kingdom collecting agent by an overseas dividend manufacturer who-
(a) is resident in the United Kingdom or, if not so resident, makes the payment in the course of a trade which he carries on through a branch or agency in the United Kingdom, and(b) is not an approved United Kingdom intermediary.(3) Subject to paragraph (4), the approved United Kingdom intermediary or approved United Kingdom collecting agent referred to in paragraph (2) shall account for and pay an amount of tax in respect of the manufactured overseas dividend which he receives equal to that which the maker of the payment would have been required to account for and pay had paragraph 4(2) of Schedule 23A applied to the payment.
(4) Paragraph (3) shall not apply where-
(a) the approved United Kingdom intermediary is entitled under regulation 5 to pay without deduction of tax an approved manufactured overseas dividend representative of the same overseas dividend as is represented by the approved manufactured overseas dividend received by him, or(b) the approved United Kingdom collecting agent has entered into arrangements with the Board under the Double Taxation Relief Regulations enabling him to pay without deduction of tax an approved manufactured overseas dividend representative of the same...To continue reading
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