Finance Act 2013

76Manufactured payments: stock lending arrangements

(1)Section 596 of ITA 2007 (deemed manufactured payments: stock lending arrangements) is amended in accordance with subsections (2) and (3).

(2)For subsection (1) substitute—

“(1)This section applies if conditions A to C are met.

(1A)Condition A is that there is a stock lending arrangement in respect of securities.

(1B)Condition B is that a dividend or interest on the securities is paid, as a result of the arrangement, to a person other than the person who is the lender under the arrangement.

(1C)Condition C is that—

(a)no provision is made for securing that the lender receives payments representative of the dividend or interest, or

(b)provision is made for securing that the lender receives—

(i)payments representative of the dividend or interest, and

(ii)another benefit in respect of the dividend or interest (including the release of the whole or part of any liability to pay an amount).”

(3)In subsection (2), for paragraph (a) substitute—

“(a)were required, under the arrangement—

(i)in a case falling within paragraph (a) of subsection (1C), to pay the lender an amount representative of the dividend or interest, or

(ii)in a case falling within paragraph (b) of that subsection, to pay the lender an amount representative of the dividend or interest but deducting from that amount any payment mentioned in sub-paragraph (i) of that paragraph on which tax has been, or is to be, charged, and”.

(4)Section 812 of CTA 2010 (deemed manufactured payments: stock lending arrangements) is amended in accordance with subsections (5) to (7).

(5)For subsection (1) substitute—

“(1)This section applies if conditions A to C are met.

(1A)Condition A is that there is a stock lending arrangement in respect of securities.

(1B)Condition B is that a dividend or interest on the securities is paid, as a result of the arrangement, to a person other than the person who is the lender under the arrangement.

(1C)Condition C is that—

(a)no provision is made for securing that the lender receives payments representative of the dividend or interest, or

(b)provision is made for securing that the lender receives—

(i)payments representative of the dividend or interest, and

(ii)another benefit in respect of the dividend or interest (including the release of the whole or part of any liability to pay an amount).”

(6)In subsection (2), for paragraph (a) substitute—

“(a)were required, under the arrangement—

(i)in a case falling within paragraph (a) of subsection (1C), to pay the lender an amount representative of the dividend or interest, or

(ii)in a case falling within paragraph (b) of that subsection, to pay the lender an amount representative of the dividend or interest but deducting from that amount any payment mentioned in sub-paragraph (i) of that paragraph on which tax has been, or is to be, charged, and”.

(7)After subsection (6) insert—

“(7)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.”

(8)The amendments made by this section have effect in relation to cases in which a dividend or interest is paid, or is treated as paid, on or after 5 December 2012.