Commentary on Sections Overview Overview Section 573: Manufactured dividends on UK shares
1709.This section defines “manufactured dividend” and states how the Income Tax Acts apply in the circumstances set out in the section. It is based on paragraphs 2(1) to (3) and 2A(1) of Schedule 23A to ICTA.
1710.For income tax purposes, subsection (2) treats the manufactured dividend in the hands of the recipient (or, if different, the owner of the manufactured dividend) as if it was a real dividend on the UK shares.
1711.Subsections (1) and (2) together ensure that if an income tax payer claims title to the manufactured dividend through or under a recipient (such as a nominee), the manufactured dividend is still treated for income tax purposes as if it was a real dividend even if the recipient is not an income tax payer.
1712.Subsections (3) and (4) deal with the position of the payer. Subsection (4) is subject to sections 574 and 575 (allowable deductions).