Citation, commencement and application

1. —(1) These Regulations may be cited as the Double Taxation Relief (Taxes on Income) (Underlying Tax on Dividends and Dual Resident Companies) Regulations 2001.

(2) These Regulations shall come into force on 31st March 2001 and shall apply in relation to any claim for an allowance by way of credit made on or after that date in respect of a dividend paid by an overseas company to a company resident in the United Kingdom, unless the dividend was paid before that date.

Interpretation

2. In these Regulations—

• “the Act”means the Income and Corporation Taxes Act 1988, and a reference to a numbered section is a reference to the section of the Act which is so numbered;

• “dual resident company” means a company which is liable, by reason of its domicile, residence or place of management or of incorporation, or other similar criterion, to tax in two or more territories;

• “overseas company” has the meaning given in section 801(1) (dividends paid between related companies: relief for UK and third country taxes) ; and

• “third company” means the company referred to as such in section 801(2).

Additional cases prescribed for the purposes of section 801(2) of the Act

3. —(1) The cases specified in paragraphs (2) and (3) are prescribed for the purposes of section 801(2) (cases where the overseas company receives a dividend from a related third company and in respect of which relief allowable for underlying tax is subject to a restriction under section 799(1)(b)).

(2) The case specified in this paragraph is that the overseas company is a dual resident company as respects an accounting period, and although resident in the same territory as the third company—

(a) it is treated for the purposes of Chapter IV of Part XVII of the Act (tax avoidance: controlled foreign companies) as resident in a different territory; or

(b) it would be so treated in accordance with paragraphs (a) to (c) of subsection (3) of section 749 (residence of controlled foreign companies)( 2 ) if that subsection applied to it.

(3) The case specified in this paragraph is that the third company is a dual resident company as respects an accounting period and although resident in the same territory as the overseas company—

(a) it is treated for the purposes of Chapter IV of Part XVII of the Act as resident in a different territory; or

(b) it would be so treated in accordance with paragraphs (a) to (c) of subsection (3) of section 749 if that subsection applied to it.