# Income and Corporation Taxes Act 1988, Paragraph 7

Extent: E+W+S+N.I.

(1) . . . In any case where (apart from this paragraph)—
(a) an amount paid by way of manufactured dividend would exceed the amount of the dividend of which it is representative, or
(b) the aggregate of—
(i) an amount paid by way of . . . manufactured overseas dividend, and
(ii) the tax required to be accounted for in connection with the making of that payment,
would exceed the gross amount (as determined in accordance with paragraph . . . 4 above) of the . . . overseas dividend of which it is representative . . . ,
the payment shall, to the extent of an amount equal to the excess, not be regarded for the purposes of this Schedule as made in discharge of the requirement referred to in paragraph 2(1). . . or 4(1) above, as the case may be, but shall instead to that extent be taken for all purposes of the Corporation Tax Acts to constitute a separate fee for entering into the contract or other arrangements under which it was made, notwithstanding anything in paragraph 2 above or anything in paragraph 4 other than in sub-paragraph (1A).
(1A) Sub-paragraph (1) above does not apply in the case of the amount of any . . . manufactured overseas dividend which falls in accordance with section 540 of CTA 2009 to be treated for the purposes of Part 5 of that Act as interest under a loan relationship.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) For the purpose of giving relief under any provision of the Corporation Tax Acts in a case falling within paragraph . . . 4(1) above where (apart from this paragraph) the aggregate referred to in sub-paragraph (1)(b) above would be less than the gross amount there mentioned—
(a) the gross amount of the . . . manufactured overseas dividend shall be taken to be an amount equal to the aggregate referred to in sub-paragraph (1)(b) above, . . .
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
notwithstanding anything in paragraph . . . 4 above.
(4) In this paragraph “relief” means relief by way of—
(a) deduction in computing profits or gains; or
(b) deduction . . . against . . . total profits.

---
Source: https://www.legislation.gov.uk/ukpga/1988/1/schedule/23A/paragraph/7 (the official version)
Page: https://openlegislation.uk/income-and-corporation-taxes-act-1988/schedule-23A/paragraph-7
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.