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TAXES CONSOLIDATION ACT, 1997
Distributions — supplemental
Explanation of tax credit to be annexed to interest and dividend warrants.
[CTA76 s5 and s83(5)]
152. —(1) Every warrant, cheque or other order drawn or made, or purporting to be drawn or made, in payment by any company of any dividend, or of any interest which is a distribution, shall have annexed to it or be accompanied by a statement in writing showing—
(a) the amount of the dividend (distinguishing a dividend or any part of it which is paid out of capital profits of the company) or interest paid,
(b) (whether or not the recipient is a person entitled to a tax credit in respect of the dividend or interest) the amount of the tax credit to which a recipient who is such a person is entitled in respect of that dividend or interest, and
(c) the period for which that dividend or interest is paid.
(2) Where a company fails to comply with any of the provisions of subsection (1), the company shall incur a penalty of £10 in respect of each offence, but the aggregate amount of the penalties imposed under this section on any company in respect of offences connected with any one distribution of dividends or interest shall not exceed £100.
(3) (a) A company which makes a distribution (not being a distribution to which subsection (1) refers) shall, if the recipient so requests in writing, furnish to the recipient a statement in writing showing the amount or value of the distribution and (whether or not the recipient is a person entitled to a tax credit in respect of the distribution) the amount of the tax credit to which a recipient who is such a person is entitled in respect of the distribution.
(b) The duty imposed by this subsection shall be enforceable at the suit or instance of the person requesting the statement.
Distributions to non-residents.
[CTA76 s83(4); FA92 s38(2); FA94 s27(a); FA95 s39]
153. —(1) Where for any year of assessment the income of a person who for that year is neither resident nor ordinarily resident in the State includes an amount in respect of a distribution made by a company resident in the State—
(a) the liability of the person to income tax in respect of the distribution shall be reduced by the amount by which that liability, before it is reduced by the tax credit (if any) in respect of the distribution, exceeds the amount (which may be nil) of that tax credit, and
(b) the amount or value of the distribution shall be treated for the purposes of sections 237 and 238 as not brought into charge to income tax.
(2) The Revenue Commissioners may by notice in writing require a company which has made a distribution to furnish them, within such time as they may direct, with such particulars as they consider necessary to identify persons benefiting from subsection (1).
Attribution of distributions to accounting periods.
[FA89 s25; FA92 s37; FA97 s38]
154. —(1) (a) Notwithstanding sections 140 , 141 , 144 , 145 and 147 (2) but subject to subsections (2) and (3), where a company which makes a distribution specifies, by notice in writing given to the inspector within 6 months of the end of the accounting period in which the distribution is made, the extent to which the distribution is to be treated for the purposes of sections 140 , 141 , 144 , 145 and 147 as made for any accounting period or periods, the distribution shall be so treated for those purposes irrespective of the period of account for which it was made.
(b) A part of a distribution treated under paragraph (a) as made for an accounting period shall be treated for the purposes of sections 140 , 141 , 144 and 145 , and subsections (1), (2) and (4) of section 147 , as a separate distribution.
(2) A company may specify in accordance with subsection (1) that only so much of a distribution, or more than one distribution, made on any day is made—
(a) for any accounting period, as does not exceed the undistributed income of the company for that accounting period on that day, and
(b) for an accounting period or accounting periods ending more than 9 years before that day, as does not exceed the amount by which the amount of the distribution or the aggregate amount of the distributions, as the case may be, exceeds the aggregate of the undistributed income of the company on that day for accounting periods ending before, but not more than 9 years before, that day.
(3) Except where a distribution made by a company is—
(a) an interim dividend paid before the 6th day of April, 2002, by the directors of the company, pursuant to powers conferred on them by the articles of association of the company, in respect of the profits of the accounting period in which it is paid,
(b) a distribution by virtue only of subparagraph (ii), (iii)(I) or (v) of section 130 (2)(d),
(c) a distribution made in respect of shares of a type referred to in paragraph (c) of the definition of “preference shares” in section 138 (1), or
(d) made in an accounting period in which the company ceases or commences to be within the charge to corporation tax,
the company shall not be entitled to specify in accordance with subsection (1) that the distribution is to be treated as made for the accounting period in which it is made.
(4) Notwithstanding subsection (3) but subject to subsection (5), a company shall not be entitled to specify in accordance with subsection (1) that a distribution, being an interim dividend or part of it, is to be treated as made for the accounting period in which it is made where—
(a) the circumstances of the company are such that, if the distribution or the part of it, as the case may be, were treated as made for the accounting period in which it is made, the company would be unable at the time when the interim dividend is paid to determine without recourse to estimation how much of the distribution or the part of it, as the case may be, would in accordance with section 147 (1) be treated as a specified distribution for the purposes of section 147 (4), or
(b) that treatment of the distribution or the part of it, as the case may be, as made for the accounting period in which it is made, would facilitate any arrangement whereby the tax credit in respect of a dividend received by a shareholder could exceed the tax credit, if any, in respect of a dividend received by another shareholder, notwithstanding that the shareholdings of those shareholders carry the same or substantially similar rights in respect of dividends and capital.
(5) Subsection (4) shall apply to a company—
(a) the profits brought into charge to corporation tax of which are wholly or mainly referable to relevant trading operations within the meaning of section 445 (1) or 446 (1), and
(i) (I) is a trading or holding company owned by a consortium for the purposes of section 165 (1)(b) or a 51 per cent subsidiary of a company resident in the State, and
(II) has not made an election under section 165 (2)(b),
(ii) is referred to in section 168 (1)(a)(ii) as “the first-mentioned company”,
as if subsection (4)(b) were deleted.
(6) For the purposes of this section, the amount of the undistributed income of a company for an accounting period on any day shall be the amount of the distributable income of the company for the accounting period as determined by section 147 (3), reduced by the amount of each distribution, or part of each distribution, made before that day and on or after the 6th day of April, 1989, which is to be treated, whether under section 147 or this section, as made for that accounting period.
Restriction of certain reliefs in respect of distributions out of certain exempt or relieved profits.
[FA90 s34(1)(a) and (b)(ii), (2), (3), (5) and (6)]
155. —(1) In this section, “distribution” has the same meaning as in the Corporation Tax Acts.
(2) (a) This section shall apply to shares in a company where any agreement, arrangement or understanding exists which could reasonably be considered to eliminate the risk that the person beneficially owning those shares—
(i) might, at or after a time specified in or implied by that agreement, arrangement or understanding, be unable to realise directly or indirectly in money or money's worth an amount so specified or implied, other than a distribution, in respect of those shares, or
(ii) might not receive an amount so specified or implied of distributions in respect of those shares.
(b) The reference in this subsection to the person beneficially owning shares shall be deemed to be a reference to both that person and any person connected with that person.
(c) For the purposes of this subsection, an amount specified or implied shall include an amount specified or implied in a foreign currency.
(3) Where any person receives a distribution in respect of shares to which this section applies and, apart from the application of this subsection to the distribution, section 140 (3)(a), 141 (3)(a), 144 (3)(a) or 145 would apply to the distribution, then, notwithstanding any provision of the Tax Acts other than subsection (4) and for the purposes of those Acts—
(a) none of those sections shall apply to the distribution,
(b) that person shall not be entitled to a tax credit in respect of the distribution, and
(c) the distribution shall be treated as income chargeable to income tax or corporation tax, as the case may be, under Case IV of Schedule D.
(4) Subsection (3) shall not apply to a distribution received—
(a) by a company—
(i) none of the shares of which is beneficially owned by a person resident in the State, and
(ii) which, if this subsection had not been enacted, would not be chargeable to corporation tax in respect of any profits other than distributions which would be so chargeable by virtue of this section, or
(b) by a person not resident in the State.
(5) Notwithstanding subsection (4), the liability to income tax or corporation tax of any person resident in the State, other than a company to which paragraph (a) of that subsection relates, shall be determined as if that subsection had not been enacted.