CFM17325 - Manufactured payments: deemed manufactured payments

Applying the tax treatment of manufactured payments to deemed manufactured payments

As discussed at CFM17245, where ICTA88/s737A (or as the case may be, ITA07/S602) applies, the dividend manufacturing rules in ICTA88/Sch23A (ITA07/S572-S591 and ITA07/S918 and S927) apply as if:

• the relevant person were required under the arrangements for transfer of the securities to pay an amount representative of the real dividend,
• a payment were made by that person in discharge of that requirement, and
• the payment were made on the date the repurchase price of the securities becomes due.

The detailed rules as to the tax treatment of manufactured payments apply equally to deemed manufactured payments as to real ones. As with real manufactured payments the tax treatment of the payment will depend on the nature of the underlying securities.