[CFM74380] CFM74380 – Other tax rules on corporate finance: manufactured payments: manufactured overseas dividends: deduction of tax: regulations
This guidance applies to manufactured payments made before 1 January 2014, when the tax rules were simplified. For manufactured payments made on or after 1 January 2014, see CFM74430.
Regulations for deduction of tax from MODs
The regulations modifying the basic approach of ITA07/S581 and S582 and ITA07/S922 – S925 are in SI1993 No 2004. Regulation 2B excludes MODs on overseas debt securities constituting loan relationships from the tax deduction regime. Such payments are not treated as annual payments unless paid by a non-trader (or by a trader who is not a company if paid otherwise than in the course of that trade). In the few cases where they are treated as annual payments, no deduction of tax is required.