Section 814D — Corporation Tax Act 2010: Treatment of recipient of manufactured dividend

Treatment of recipient of manufactured dividend 814D 1 Subsection (2) applies if a company has a manufactured dividend relationship under which a manufactured dividend is payable to it.

2 For the purposes of the charge to corporation tax on the income of the company, the Corporation Tax Acts apply to the company, and any company claiming title through or under the company, as if the manufactured dividend were a dividend on the shares.

3 Subsection (2) is subject to subsections (4) to (8).

4 Subsection (2) does not apply in relation to a company so far as the manufactured dividend is brought into account under Part 3 of CTA 2009 in calculating the profits of a trade carried on by the company.

5 Subsection (2) does not apply in relation to a company for the purposes of determining entitlement to double taxation relief in respect of any dividend.

6 Part 9A of CTA 2009 (company distributions), in its application in relation to a manufactured dividend as a result of subsection (2), has effect with the modification in subsection (7).

7 The modification is that—

a references in that Part to the payer are to be treated as references to the company that pays the real dividend, and b the definition of “the payer” in section 931T is to be treated as omitted.

8 The company to which the manufactured dividend is payable is not entitled to a tax credit under section 1109 (tax credits for certain recipients of exempt qualifying distributions) in respect of the dividend.

9 For the purposes of subsection (5) “ double taxation relief ” means any relief given under or as a result of Part 2 of TIOPA 2010.

10 This section has effect regardless of section 358 of CTA 2009 (exclusion of credits on release of connected companies debts) or any other provision of Part 5 of that Act (loan relationships) which prevents a credit from being brought into account.