Paragraph 2B

United Kingdom

(1)

This paragraph has effect for the purposes of paragraph 2(1A)(b) above.

(2)

No payment of dividend by a controlled foreign company for an accounting period shall be regarded as involved in a UK tax avoidance scheme by reason only that there is no charge to tax under section 747(4)(a) if the controlled foreign company pursues an acceptable distribution policy for that accounting period.

(3)

“UK tax avoidance scheme” means a scheme or arrangement the purpose, or one of the main purposes, of which is to achieve a reduction in United Kingdom tax.

(4)

A scheme or arrangement achieves a reduction in United Kingdom tax if, apart from the scheme or arrangement, any company—

(a)

would have been liable for any such tax or for a greater amount of any such tax; or

(b)

would not have been entitled to a relief from or repayment of any such tax or would have been entitled to a smaller relief from or repayment of any such tax.

(5)

In this paragraph—

“arrangement” means an arrangement of any kind, whether in writing or not;
“United Kingdom tax” means corporation tax or any tax chargeable as if it were corporation tax.

Notes on Schedule 25

Textual amendments

F1: Sch. 25 heading substituted (with effect in accordance with Sch. 17 para. 37 of the amending Act) by Finance Act 1998 (c. 36), Sch. 17 para. 25; S.I. 1998/3173, art. 2

Notes on Part I

Textual amendments

F1: Sch. 25 Pt. 1 (paras. 1-4A) omitted (with effect in accordance with Sch. 16 para. 6 of the repealing Act) by virtue of Finance Act 2009 (c. 10), Sch. 16 para. 1(3) (with Sch. 16 paras. 7-9) (subject, as saved, to amendment by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 147(2) (with Sch. 2))