Corporation Tax Act 2010 section 782

Meaning of "manufactured dividend"

Section 782 defines what a "manufactured dividend" means for the purposes of the rules on manufactured payments.

• A manufactured dividend is a payment made to replicate a real dividend, typically arising when shares are borrowed or sold under a repo arrangement and the borrower or interim holder must pass on the equivalent of any dividend to the original owner.
• The definition covers payments that are representative of dividends on UK shares, ensuring that such payments receive appropriate tax treatment even though they are not actual distributions by the company whose shares are involved.
• The term "UK shares" used in this section has a specific meaning, which is set out separately in section 814 of the Act.
• This is a purely interpretative provision — it does not impose a tax charge itself but underpins the charging and relieving rules elsewhere in this Part of the Act.