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HMRC internal manual

General Insurance Manual

Double taxation relief: underlying tax on dividends referable to an overseas branch: accounting periods beginning before 1 April 2000


ICTA88/S801 requires that a UK company have 10% of the voting power in a foreign company before it can get relief for any part of the tax paid by the foreign company on its profits, when a dividend is paid out of those profits.

But for accounting periods beginning before 1 April 2000, ICTA88/S802 allows relief to a UK resident insurance company, which carries on all or part of its general insurance business through a branch or agency in an overseas territory, for underlying tax in respect of dividends referable to the branch business and received from companies resident in the same overseas territory as the one in which the branch or agency is situated.

This is so even if the insurance company does not hold the requisite percentage of voting power for relief under section 801. The underlying tax available for credit includes any overseas tax and any United Kingdom income tax or corporation tax payable by the overseas company in respect of its profits.

Extra-statutory concession C1(b) extends the statutory relief under ICTA88/S802 (GIM12150).

Section 802 is repealed by FA2000/SCH30/PARA14 with effect for accounting periods beginning on or after 1 April 2000. ESCC1 (b) is also withdrawn with effect for such periods.