Explanatory note

These Regulations supplement the provisions of Chapter VIIA of Part IV of the Income and Corporation Taxes Act 1988 (inserted by paragraph 1 of Schedule 29 to the Finance Act 1996) which relate to the accounting for tax on foreign dividends by paying agents, and the accounting for tax on foreign dividends and quoted Eurobond interest by collecting agents. The Regulations make further provision in relation to the circumstances whereby paying and collecting agents are not liable to account for tax in respect of such dividends or interest paid or received by them.

Regulation 1 provides for citation and commencement, and regulation 2 for interpretation.

Regulation 3 provides that the exemption from liability to account for tax on dividends or interest paid or accounted for to, or at the direction of, a depositary for a recognised clearing system shall not apply unless the depositary makes a declaration in the terms set out in the regulation.

Regulation 4 makes a similar provision to regulation 3 in relation to declarations by non-residents and other persons to whom, or at whose direction, dividends or interest are payable.

Regulations 5 and 6 supplement the provisions of regulation 4 in connection with the terms of the declarations.

Regulations 7 and 8 provide for quarterly returns to be made to the Board of Inland Revenue (“the Board”) by paying and collecting agents, setting out details of dividends or interest paid or received in that quarter and the amount of tax for which the agent is liable to account in respect of that quarter.

Regulation 9 provides for assessments by the Board in respect of unpaid tax.

Regulation 10 provides for notices to be issued by the Board to paying or collecting agents directing that dividends or interest paid or received by those agents are, or (as the case may be) are not, payments in respect of which they are liable to account for tax.

Regulations 11 to 13 provide for the furnishing of information to the Board by paying or collecting agents, the inspection of their records by officers of the Board, and the retention of records by such agents.

Regulation 14 provides for the furnishing of information by persons who have made declarations under regulation 3 or 4, and regulations 15 and 16 provide for the retention and production of such declarations by paying and collecting agents.