It was difficult to reconcile different decisions of the higher courts. Nevertheless, the declaration and payment of a dividend which did not involve any transaction in securities, or alteration of rights attaching to securities, was not itself a dealing in securities. The arrangement involved the declaration of abnormally large dividends in purchasing another company so as to create franked income which it could then set off against its own liability to tax at tax rates applicable to its group. If a payment operated to extinguish a security, it might become such a transaction, but in this case it had not.
Citations:
Times 13-Mar-2001, Gazette 20-Apr-2001
Statutes:
Income and Corporation Taxes Act 1988 706
Jurisdiction:
England and Wales
Taxes Management, Corporation Tax
Updated: 17 June 2022; Ref: scu.82347