Section GB 37 — Income Tax Act 2007: Arrangements for payment of dividend by other companies

GB 37 Arrangements for payment of dividend by other companies When this section applies (1) This section applies when— (a) an arrangement is entered into in relation to a company (the first company ) and a shareholder in the first company; and (b) the arrangement has a purpose of allowing a dividend to be paid by another company to any of the following parties (the payee ): (i) the shareholder: (ii) if the shareholder is a trustee in relation to the shareholding, a beneficiary of the trust: (iii) an associated person of the shareholder: (iv) an associated person of a beneficiary of the trust. Direct or indirect payments (2) The arrangement may include— (a) the payee acquiring shares in the other company: (b) a form of indirect payment of a dividend from the other company. Dividend treated as paid by first company (3) For the purposes of the imputation rules, the dividend is treated as if it were paid by the first company. No imputation credit (4) Any imputation credit attached to the dividend paid by the other company— (a) is not included in the amount of the dividend derived by the payee; and (b) is not treated as an imputation credit for the purposes of section LE 1 (Tax credits for imputation credits); and (c) is a debit under section OB 30 (ICA payment of dividend) of the first company. Defined in this Act: arrangement , associated person , company , dividend , imputation credit , imputation credit account , share , shareholder , trustee , Compare: 2004 No 35 s GC 23