Income Tax Act 2007 section 925C

Actual payments ignored if section 925A applies

Section 925C is a priority rule that ensures where a creditor repo arrangement falls within the deemed manufactured payment rules of section 925A, any actual manufactured payment made under that arrangement is disregarded for the purposes of the manufactured payments provisions.

• Where section 925A(2) applies to a creditor repo, any actual payment made under the arrangement that represents income on the underlying securities is treated as if it had never been made.
• This treatment applies specifically for the purposes of the manufactured payments rules in sections 918 (manufactured dividends on UK shares and REITs), 919 (manufactured interest on UK securities), and 921 (cases where interest on underlying securities is paid gross).
• The section acts as a priority rule: the deemed manufactured payment treatment under section 925A or 925B takes precedence over the normal manufactured payment rules that would otherwise apply to the actual payment.
• This prevents a double charge arising where a repo transaction involves both a real manufactured payment and a deemed manufactured payment under the creditor repo provisions.