CFM17335 - Manufactured payments: detailed rules

Detailed rules on the three main types of manufactured payment

The legislation dealing with manufactured payments is mainly contained in ICTA88/SCH23A (now Chapter 2, Part 11 and Chapter 9 Part 15 ITA07). The three main types of manufactured payments are

• manufactured dividends on UK shares CFM17340
• manufactured interest on UK securities CFM17345
• manufactured overseas dividends (MODs) CFM17360.

As noted at CFM17320, the main thrust of the legislation is to tax and relieve manufactured payments as far as possible in the same way as the underlying 'real' interest or dividends.

Since manufactured payments can be made or received by individuals as well as companies, this guidance covers both. CT&VAT Products and Processes Tax has also published comprehensive guidance notes on manufactured payments, which can be found at www.hmrc.gov.uk/mpgn. These cover:

• UK shares
• UK debt securities
• Overseas securities