Regulation 48 General

Paragraph (2) applies if—

F1Subject to paragraphs (2A)F2, (2B) and (2BA), for the purpose of computing the corporation tax chargeable upon the participant, the unfranked part of the dividend distribution is treated—

But paragraph (2) does not apply to a dividend distribution to which F6Chapter 2 of Part 3 of CTA 2009 applies F7unless the dividend distribution is made to—

Expressions used in paragraph (a) or (b) have the same meaning as they have in Part 2 of FA 2012.

If, on the distribution date, the participant is the manager of the authorised investment fund, paragraph (2) shall not apply to the extent that the rights in respect of which the dividend distribution is made are held by him in the ordinary course of the manager’s business as manager of the fund.

Paragraph (2)(b) does not apply to so much of any dividend distribution as on a just and reasonable apportionment is attributable to an unallowable arrangement.

For the purposes of paragraph (2BA), an unallowable arrangement is an arrangement the main purpose or one of the main purposes of which is to secure that an amount of tax, or an increased amount of tax, is treated as deducted under paragraph (2)(b).

In paragraph (2BB), “arrangement” includes any arrangement, agreement, scheme, transaction, series of transactions or understanding (whether or not legally enforceable).

Regulation 48A makes provision in relation to the unfranked part of the dividend distribution treated as an annual payment under paragraph (2)(a) and regulation 48B makes provision in relation to the tax treated as deducted under paragraph (2)(b).

Regulation 49 explains how to calculate the unfranked part of the dividend distribution.

This regulation does not apply in respect of a holding in a qualified investor scheme if the scheme has not met the genuine diversity of ownership condition in regulation F119A in relation to an accounting period.