Income Tax Act 2007

Interpretation

589 Meaning of “gross amount”: interest and manufactured overseas dividends

(1) This section applies for the purposes of this Chapter.

(2) The gross amount of any interest or payment is the amount of the interest or payment before the making of any deduction of income tax that is required to be deducted from it on its being paid or made.

(3) The gross amount of a manufactured overseas dividend is an amount equal to the gross amount of the overseas dividend of which the manufactured overseas dividend is representative.

(4) The gross amount of an overseas dividend is the sum of—

(a) so much of the overseas dividend as remains after the deduction of any overseas tax chargeable on it,

(b) the amount of any overseas tax so deducted, and

(c) the amount of any overseas tax credit in respect of the overseas dividend.

590 Meaning of “relevant withholding tax”

(1) This section applies for the purposes of this Chapter.

(2) “Relevant withholding tax”, in relation to the gross amount of a manufactured overseas dividend, means an amount of income tax representative of the sum of—

(a) any amount that would have been deducted by way of overseas tax from an overseas dividend on the overseas securities of the same gross amount as the manufactured overseas dividend, and

(b) the amount of any overseas tax credit in respect of such an overseas dividend.

(3) The Treasury may by regulations make provision about the rates of relevant withholding tax which are to apply in relation to manufactured overseas dividends in relation to different overseas territories.

(4) The Treasury must, in prescribing these rates, have regard to—

(a) the rates at which overseas tax would have fallen to be deducted, and

(b) the rates of overseas tax credits,

in overseas territories, or in the particular overseas territory, in respect of payments of overseas dividends on overseas securities.

591 Interpretation of other terms used in Chapter

(1) In this Chapter—

• “C (tax-exempt)” has the meaning given by section 105(3) of FA 2006,

• “G (property rental business)” has the meaning given by paragraph 2 of Schedule 17 to FA 2006,

• “group” and “principal company” have the meanings given by section 134 of FA 2006,

• “overseas tax” means tax under the law of a territory outside the United Kingdom,

• “overseas tax credit” means any credit under the law of a territory outside the United Kingdom in respect of overseas tax which corresponds to a tax credit,

• “prescribed” means prescribed in regulations under this Chapter, and

• “transfer” includes a sale or other disposal.

(2) References in this Chapter to a trade carried on through a branch or agency are to be read, in relation to a company, as references to a trade carried on through a permanent establishment.