42. Foreign Dividends

Part of the debate – in the House of Commons at 9:30 pm on 22nd March 1993.

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Resolved,That, in relation to transactions effected on or after 6th April 1993, Schedule 3 to the Income and Corporation Taxes Act 1988 shall be amended as follows— (1) In sub-paragraph (1) of paragraph 6A, for "basic rate" there shall be substituted "applicable rate".(2) After sub-paragraph (2) of that paragraph there shall be inserted the following sub-paragraph—(2A) Payments of tax made on any person's behalf under this paragraph shall be treated as made for the purpose only of being applied in the discharge of that person's liability to tax charged (otherwise than by virtue of this paragraph) on the dividends or proceeds to which the payments relate.(3) After sub-paragraph (3) of that paragraph there shall be inserted the following sub-paragraph—(4) For the purposes of sub-paragraph (1) above the applicable rate shall be—

  1. (a) the lower rate, in the case of a foreign dividend which is neither interest nor any other annual payment which is made otherwise than by way of dividend; and
  2. (b) the basic rate in any other case."
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.