INCOME TAX Citation and commencement 1 These Regulations may be cited as the Income Tax (Manufactured Overseas Dividends) (Amendment) Regulations 1997 and shall come into force on 1st July 1997. Interpretation 2 In these Regulations “the principal Regulations ” means the Income Tax (Manufactured Overseas Dividends) Regulations 1993 , and “regulation” means a regulation of the principal Regulations. Amendments to the principal Regulations 3 In regulation 2A — a in paragraph (1)— i in sub-paragraph (b) for the words from “pays” to “being” there shall be substituted the words “draws up accounts for any period (“the accounts period”), means”; ii in sub-paragraph (c) for the words from “pays” to the end there shall be substituted the words “does not draw up accounts, means a year of assessment”; b paragraph (3) shall be omitted. 4 In regulation 4 for paragraph (2) there shall be substituted— 2 The circumstances prescribed by this paragraph are where— a a manufactured overseas dividend is paid to an approved United Kingdom intermediary or an approved United Kingdom collecting agent by an overseas dividend manufacturer who— i is resident in the United Kingdom or, if not so resident, makes the payment in the course of a trade which he carries on through a branch or agency in the United Kingdom, and ii is not an approved United Kingdom intermediary; and b the manufactured overseas dividend is not representative of the overseas dividend received by the overseas dividend manufacturer. 5 In regulation 7(3A) after the words “paragraph 4(3) of that Schedule” there shall be inserted the words “were an amount equal to the excess of the gross amount of the overseas dividend over the amount of that overseas dividend received by the overseas dividend manufacturer and”. 6 In regulation 9 for paragraph (4A) there shall be substituted— 4A Subject to paragraphs (4B) and (5), where overseas dividends or manufactured overseas dividends received by the overseas dividend manufacturer in any chargeable period fall to be matched, in accordance with regulation 10(1), against manufactured overseas dividends paid by him in that period, relief under Part XVIII of the Taxes Act may not be claimed by the overseas dividend manufacturer in respect of any tax referred to in paragraph (1A) that is attributable to those overseas dividends or manufactured overseas dividends received. 4B Where overseas dividends or manufactured overseas dividends received by the overseas dividend manufacturer in any chargeable period fall to be matched, in accordance with regulation 10(1), against manufactured overseas dividends to which regulation 5 applies that are paid by him in that period, relief under section 811 of the Taxes Act shall be given to the overseas dividend manufacturer in respect of any tax referred to in paragraph (1A) that is attributable to those overseas dividends or manufactured overseas dividends received. 4C Subject to paragraph (5), where tax referred to in paragraph (1A) that is attributable to overseas dividends or manufactured overseas dividends received by the overseas dividend manufacturer in any chargeable period is set off, in accordance with this regulation, against tax referred to in paragraph (1B) that is attributable to manufactured overseas dividends paid by him in that period, relief under Part XVIII of the Taxes Act may not be claimed by the overseas dividend manufacturer in respect of any tax referred to in paragraph (1A) that is attributable to those overseas dividends or manufactured overseas dividends received. 7 After regulation 9 there shall be inserted the following regulation— Offsetting of tax by overseas dividend manufacturers who are not United Kingdom intermediaries 9A 1 An overseas dividend manufacturer who is not an approved United Kingdom intermediary shall be entitled to set off in any chargeable period amounts of overseas tax in respect of overseas dividends received by him in that chargeable period against sums due from him on account of the amounts deducted by him under paragraph 4(2) of Schedule 23A from manufactured overseas dividends paid by him in that chargeable period that are representative of those overseas dividends. 2 Where overseas tax referred to in paragraph (1) is set off against sums referred to in that paragraph, relief under Part XVIII of the Taxes Act may not be claimed by the overseas dividend manufacturer in respect of that overseas tax. 3 References in this regulation to overseas tax shall be construed in accordance with regulation 9(7). 8 In regulation 10(1)(a)(iii) for “9(3)” there shall be substituted “9(1A)”. 9 1 In regulation 11(2) for “90” there shall be substituted “30”. 2 Paragraph (1) has effect in relation to chargeable periods ending on or after 1st July 1997. Roger Knapman Richard Ottaway Two of the Lords Commissioners of Her Majesty’s Treasury 20th March 1997