Section 814B | Key definitions

(1)For the purposes of the Corporation Tax Acts a company has a manufactured dividend relationship if conditions A to C are met.

(2)Condition A is that under any arrangements—

(a)an amount is payable by or to the company, or

(b)any other benefit is given by or to the company (including the release of the whole or part of any liability to pay an amount).

(3)Condition B is that the arrangements relate to the transfer of shares in a company.

(4)Condition C is that the amount or value of the other benefit—

(a)is representative of a dividend on the shares, or

(b)will fall to be treated as representative of such a dividend when it is paid or given.

(5)In subsection (2) the reference to an amount being payable, or other benefit being given, by the company includes a reference to an amount being payable, or other benefit being given, by another person on behalf of the company.

(6)In this Part—

“manufactured dividend”, in relation to a manufactured dividend relationship, means an amount, or the value of a benefit, within subsection (2), and

“the real dividend” means the dividend mentioned in subsection (4)(a).