|
| |
|
is made to deduct tax under section 349(2) of ICTA in the case of interest |
| |
distributions within that subsection). |
| |
(5) | The amount of the payment treated as made to each owner is so much of the |
| |
total amount mentioned in subsection (1) as is proportionate to the owner’s |
| |
| 5 |
(6) | This section only applies if the condition in section 468L(1A) of ICTA (the |
| |
qualifying investments test) is met throughout the distribution period. |
| |
(7) | This section does not apply if the open-ended investment company is an |
| |
approved personal pension scheme. |
| |
(8) | See section 375 for the interpretation of this section and section 374. |
| 10 |
374 | Date when interest payments under section 373 made |
| |
(1) | This section applies for determining the date on which payments of interest |
| |
under section 373 are treated as made. |
| |
(2) | The date on which the payments are treated as made depends on whether a |
| |
date is specified for any distribution for the distribution period in question by |
| 15 |
| |
(a) | the company’s instrument of incorporation and its prospectus in issue |
| |
for the time being (including any supplements), or |
| |
(b) | in the case of an open-ended investment company which is part of an |
| |
umbrella company, such parts of those documents of the umbrella |
| 20 |
company as apply to the open-ended investment company. |
| |
(3) | If such a date is so specified, the payments are treated as made on that date. |
| |
(4) | If no such date is so specified, the payments are treated as made on the last day |
| |
| |
375 | Interpretation of sections 373 and 374 |
| 25 |
(1) | In sections 373 and 374 and this section— |
| |
“approved personal pension scheme” has the same meaning as in Chapter |
| |
4 of Part 14 of ICTA (see section 630(1) of that Act), |
| |
“distribution” includes investment on behalf of an owner of shares in |
| |
respect of the owner’s accumulation shares, |
| 30 |
“distribution accounts” means the accounts showing how the total |
| |
amount available for distribution to owners of shares is calculated, |
| |
“distribution period” means the period by reference to which that amount |
| |
| |
“the OEIC Regulations” means the Open-ended Investment Companies |
| 35 |
(Tax) Regulations 1997 (S.I. 1997/1154), |
| |
“open-ended investment company” has the same meaning as in Chapter |
| |
3 of Part 12 of ICTA (unit trust schemes etc.) (see section 468(10) and |
| |
(11) of ICTA, as inserted by regulation 10 of the OEIC Regulations), |
| |
“owner of shares” has the same meaning as in that Chapter (see section |
| 40 |
468(10) and (15) of that Act, as so inserted), and |
| |
“umbrella company” has the same meaning as in section 468 of that Act |
| |
(see section 468(18), as so inserted). |
| |
|
| |
|
| |
|
(2) | In subsection (1) “accumulation share” means a share in respect of which |
| |
income is credited periodically to the capital part of the company’s scheme |
| |
| |
(3) | In subsection (2) “scheme property” has the same meaning as in Chapter 3 of |
| |
Part 12 of ICTA (unit trust schemes etc.) (see section 468(10) and (13) of ICTA, |
| 5 |
as inserted by regulation 10 of the OEIC Regulations). |
| |
376 | Authorised unit trust interest distributions |
| |
(1) | This section applies if the distribution accounts of an authorised unit trust |
| |
show the total amount available for distribution to unit holders as available for |
| |
distribution as yearly interest. |
| 10 |
(2) | Subsection (1) is subject to subsections (6) and (7). |
| |
(3) | For income tax purposes payments of yearly interest are treated as made to the |
| |
| |
(4) | Subsection (3) is subject to the qualifications in section 468L(4) of ICTA (which |
| |
modifies the obligation for a person by or through whom a payment of interest |
| 15 |
is made to deduct tax under section 349(2) of ICTA in the case of interest |
| |
distributions within that subsection). |
| |
(5) | The amount of the payment treated as made to each unit holder is so much of |
| |
the total amount mentioned in subsection (1) as is proportionate to the unit |
| |
| 20 |
(6) | This section only applies if the condition in section 468L(1A) of ICTA (the |
| |
qualifying investments test) is met throughout the distribution period. |
| |
(7) | This section does not apply if the authorised unit trust is an approved personal |
| |
| |
(8) | See section 378 for the interpretation of this section and section 377. |
| 25 |
377 | Date when interest payments under section 376 made |
| |
(1) | This section applies for determining the date on which payments of interest |
| |
under section 376 are treated as made. |
| |
(2) | The date on which the payments are treated as made depends on whether a |
| |
date is specified by or in accordance with the trust’s terms for any distribution |
| 30 |
for the distribution period in question. |
| |
(3) | If such a date is so specified, the payments are treated as made on that date. |
| |
(4) | If no such date is so specified, the payments are treated as made on the last day |
| |
| |
378 | Interpretation of sections 376 and 377 |
| 35 |
| |
“approved personal pension scheme” has the same meaning as in Chapter |
| |
4 of Part 14 of ICTA (see section 630(1) of that Act), |
| |
“distribution” includes investment on behalf of a unit holder in respect of |
| |
the holder’s accumulation units, |
| 40 |
|
| |
|
| |
|
“distribution accounts” means the accounts showing how the total |
| |
amount available for distribution to unit holders is ascertained, and |
| |
“distribution period” means the period by reference to which that amount |
| |
| |
379 | Industrial and provident society payments |
| 5 |
(1) | Any dividend, bonus or other sum payable to a shareholder in— |
| |
(a) | a registered industrial and provident society, or |
| |
(b) | a UK agricultural or fishing co-operative, |
| |
| is treated as interest for income tax purposes if it is payable by reference to the |
| |
amount of the shareholder’s holding in its share capital. |
| 10 |
| |
“registered industrial and provident society” means a society registered |
| |
or treated as registered under the Industrial and Provident Societies |
| |
Act 1965 (c. 12) or the Industrial and Provident Societies Act (Northern |
| |
Ireland) 1969 (c. 24 (N.I.)), and |
| 15 |
“UK agricultural or fishing co-operative” means a co-operative |
| |
| |
(a) | which is established in the United Kingdom and UK resident, |
| |
| |
(b) | whose primary object is assisting its members in— |
| 20 |
(i) | carrying on agricultural or horticultural businesses on |
| |
land occupied by them in the United Kingdom, or |
| |
(ii) | carrying on businesses consisting in the catching or |
| |
taking of fish or shellfish. |
| |
(3) | In subsection (2) “co-operative association” means a body with a written |
| 25 |
constitution from which the Secretary of State considers that it is in substance |
| |
a co-operative association. |
| |
(4) | For the purposes of subsection (3), the Secretary of State must have regard to |
| |
the way in which the body’s constitution provides for its income to be applied |
| |
for its members’ benefit and all other relevant provisions. |
| 30 |
(5) | In Northern Ireland subsections (3) and (4) apply with the substitution for “the |
| |
Secretary of State” of “the Department of Agriculture and Rural Development”. |
| |
| |
(1) | This section applies to the issue of funding bonds to a creditor in respect of a |
| |
liability to pay interest on a debt incurred by a government, public institution, |
| 35 |
other public authority or body corporate. |
| |
(2) | The issue is treated for income tax purposes as if it were the payment of so |
| |
much of that interest as equals the market value of the bonds at their issue. |
| |
(3) | In this section “funding bonds” includes any bonds, stocks, shares, securities or |
| |
certificates of indebtedness. |
| 40 |
| |
(1) | All discounts, other than discounts in deeply discounted securities, are treated |
| |
as interest for the purposes of this Act. |
| |
|
| |
|
| |
|
(2) | In this section “deeply discounted securities” means securities to which |
| |
Chapter 8 of this Part applies (profits from deeply discounted securities). |
| |
| |
Dividends etc. from UK resident companies etc. |
| |
| 5 |
| |
| |
(a) | imposes a charge to income tax on dividends and other distributions of |
| |
UK resident companies (see section 383), |
| |
(b) | treats dividends as paid in some circumstances (see sections 386 to 391), |
| 10 |
| |
(c) | makes special provision where the charge is in respect of shares |
| |
awarded under an approved share incentive plan (see sections 392 to |
| |
| |
(2) | This Chapter also makes provision about tax credits, tax being treated as paid |
| 15 |
and reliefs available in respect of certain distributions which applies whether |
| |
or not the distributions are otherwise dealt with under this Chapter (see |
| |
| |
(3) | For exemptions from the charge under this Chapter, see in particular— |
| |
Chapter 3 of Part 6 (income from individual investment plans), |
| 20 |
Chapter 5 of that Part (venture capital trust dividends), |
| |
section 770 (amounts applied by SIP trustees acquiring dividend shares or |
| |
retained for reinvestment), and |
| |
section 498 of ITEPA 2003 (no charge on shares ceasing to be subject to SIP |
| |
in certain circumstances). |
| 25 |
(4) | In this Chapter “dividends” does not include income treated as arising under |
| |
section 410 (stock dividends). |
| |
Charge to tax on dividends and other distributions |
| |
383 | Charge to tax on dividends and other distributions |
| |
(1) | Income tax is charged on dividends and other distributions of a UK resident |
| 30 |
| |
(2) | For income tax purposes such dividends and other distributions are to be |
| |
| |
(3) | For the purposes of subsection (2), it does not matter that those dividends and |
| |
other distributions are capital apart from that subsection. |
| 35 |
| |
(1) | Tax is charged under this Chapter on the amount or value of the dividends |
| |
paid and other distributions made in the tax year. |
| |
|
| |
|
| |
|
(2) | Subsection (1) is subject to— |
| |
section 393(2) and (3) (later charge where cash dividends retained in SIPs |
| |
| |
section 394(3) (distribution when dividend shares cease to be subject to |
| |
| 5 |
(3) | See also section 398 (under which the amount or value of the dividends or other |
| |
distributions is treated as increased if any person is entitled to a tax credit in |
| |
| |
| |
(1) | The person liable for any tax charged under this Chapter is— |
| 10 |
(a) | the person to whom the distribution is made or is treated as made (see |
| |
Part 6 of ICTA and sections 386(3) and 389(3)), or |
| |
(b) | the person receiving or entitled to the distribution. |
| |
(2) | Subsection (1) is subject to— |
| |
section 393(4) (later charge where cash dividends retained in SIPs are paid |
| 15 |
| |
section 394(4) (distribution when dividend shares cease to be subject to |
| |
| |
Amounts treated as dividends |
| |
386 | Open-ended investment company dividend distributions |
| 20 |
(1) | This section applies if the distribution accounts of an open-ended investment |
| |
company show the total amount available for distribution to owners of shares |
| |
in the company as available for distribution as dividends. |
| |
(2) | Subsection (1) is subject to subsection (5). |
| |
(3) | For income tax purposes dividends are treated as paid to the owners of the |
| 25 |
| |
(4) | The amount of the dividends treated as paid to each owner is so much of the |
| |
total amount mentioned in subsection (1) as is proportionate to the owner’s |
| |
| |
(5) | This section does not apply if the open-ended investment company is an |
| 30 |
approved personal pension scheme. |
| |
(6) | See section 388 for the interpretation of this section and section 387. |
| |
387 | Date when dividends paid under section 386 |
| |
(1) | This section applies for determining the date on which dividends are treated as |
| |
| 35 |
(2) | The date on which the dividends are treated as paid depends on whether a date |
| |
is specified for the distribution period in question by or in accordance with— |
| |
(a) | the company’s instrument of incorporation and its prospectus in issue |
| |
for the time being (including any supplements), or |
| |
|
| |
|
| |
|
(b) | in the case of an open-ended investment company which is part of an |
| |
umbrella company, such parts of those documents of the umbrella |
| |
company as apply to the open-ended investment company. |
| |
(3) | If such a date is so specified, the dividends are treated as paid on that date. |
| |
(4) | If no such date is so specified, the dividends are treated as paid on the last day |
| 5 |
| |
388 | Interpretation of sections 386 and 387 |
| |
(1) | In sections 386 and 387 and this section— |
| |
“approved personal pension scheme” has the same meaning as in Chapter |
| |
4 of Part 14 of ICTA (see section 630(1) of that Act), |
| 10 |
“distribution” includes investment on behalf of an owner of shares in |
| |
respect of the owner’s accumulation shares, |
| |
“distribution accounts” means the accounts showing how the total |
| |
amount available for distribution to owners of shares is calculated, |
| |
“distribution period” means the period by reference to which that amount |
| 15 |
| |
“the OEIC Regulations” means the Open-ended Investment Companies |
| |
(Tax) Regulations 1997 (S.I. 1997/1154), |
| |
“open-ended investment company” has the same meaning as in Chapter |
| |
3 of Part 12 of ICTA (unit trust schemes etc.) (see section 468(10) and |
| 20 |
(11) of ICTA, as inserted by regulation 10 of the OEIC Regulations), |
| |
“owner of shares” has the same meaning as in that Chapter (see section |
| |
468(10) and (15) of that Act, as so inserted), and |
| |
“umbrella company” has the same meaning as in section 468 of that Act |
| |
(see section 468(18), as so inserted). |
| 25 |
(2) | In subsection (1) “accumulation share” means a share in respect of which |
| |
income is credited periodically to the capital part of the company’s scheme |
| |
| |
(3) | In subsection (2) “scheme property” has the same meaning as in Chapter 3 of |
| |
Part 12 of ICTA (unit trust schemes etc.) (see section 468(10) and (13) of ICTA, |
| 30 |
as inserted by regulation 10 of the OEIC Regulations). |
| |
389 | Authorised unit trust dividend distributions |
| |
(1) | This section applies if the distribution accounts of an authorised unit trust |
| |
show the total amount available for distribution to unit holders as available for |
| |
distribution as dividends. |
| 35 |
(2) | Subsection (1) is subject to subsection (6). |
| |
(3) | For income tax purposes dividends are treated as paid to the unit holders. |
| |
(4) | The amount of the dividends treated as paid to each unit holder is so much of |
| |
the total amount mentioned in subsection (1) as is proportionate to the unit |
| |
| 40 |
(5) | The dividends are treated as paid on the shares and by the company referred |
| |
to in section 468(1) of ICTA (which relates to the trustees of an authorised unit |
| |
trust being treated as a UK resident company in which the unit holders’ rights |
| |
| |
|
| |
|
| |
|
(6) | This section does not apply if the authorised unit trust is an approved personal |
| |
| |
(7) | See section 391 for the interpretation of this section and section 390. |
| |
390 | Date when dividends paid under section 389 |
| |
(1) | This section applies for determining the date on which dividends are treated as |
| 5 |
| |
(2) | The date on which the dividends are treated as paid depends on whether a date |
| |
is specified by or in accordance with the trust’s terms for any distribution for |
| |
the distribution period in question. |
| |
(3) | If such a date is so specified, the dividends are treated as paid on that date. |
| 10 |
(4) | If no such date is so specified, the dividends are treated as paid on the last day |
| |
| |
391 | Interpretation of sections 389 and 390 |
| |
| |
“approved personal pension scheme” has the same meaning as in Chapter |
| 15 |
4 of Part 14 of ICTA (see section 630(1) of that Act), |
| |
“distribution” includes investment on behalf of a unit holder in respect of |
| |
the holder’s accumulation units, |
| |
“distribution accounts” means the accounts showing how the total |
| |
amount available for distribution to unit holders is ascertained, and |
| 20 |
“distribution period” means the period by reference to which that amount |
| |
| |
Shares in approved share incentive plans ("SIPs") |
| |
392 | SIP shares: introduction |
| |
(1) | Sections 393 to 395 contain special rules about the charge under this Chapter in |
| 25 |
respect of shares awarded to an individual under an approved share incentive |
| |
| |
(2) | Those sections only apply if condition A or B was met at the time the shares in |
| |
question were so awarded. |
| |
| 30 |
(a) | the earnings from the eligible employment were general earnings (see |
| |
section 7(3) of ITEPA 2003) to which any of the charging provisions of |
| |
Chapter 4 or 5 of Part 2 of ITEPA 2003 applied, or |
| |
(b) | if there had been any earnings from it, they would have been such |
| |
| 35 |
| |
(a) | “the eligible employment” means the employment resulting in the |
| |
individual meeting the employment requirement in relation to the |
| |
| |
|
| |
|