Income Tax Act 2007 section 595

Meaning of "manufactured dividend"

Section 595 defines the term "manufactured dividend" for the purposes of the chapter dealing with stock lending and manufactured payments.

• A manufactured dividend is a payment that stands in for a real dividend when shares are temporarily transferred under a stock lending or repo arrangement.
• The definition used in this section is the same as the one established in Chapter 2 of the same Part of the Act, ensuring consistency across related provisions.
• This definition is relevant when determining the tax treatment of payments made to compensate a lender of shares for dividends they would otherwise have received.
• The section originates from earlier provisions in sections 231AA(4) and 231AB(3) of the Income and Corporation Taxes Act 1988, which were rewritten into the 2007 Act.