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CD 14: Notional distributions of emigrating companies
or “Tax rules for pretend dividends when a company moves overseas”
You could also call this:

“How tax credits are included when you receive a dividend”

When you receive a dividend, the amount includes any imputation credits attached to it. If you’re a beneficiary, there might be a limit on the imputation credit. The dividend amount also includes any Resident Withholding Tax (RWT) or Non-Resident Withholding Tax (NRWT) that was withheld or paid for the dividend.

There are some exceptions to this rule. It doesn’t apply in certain parts of the tax law, like the parts about tax credits, tax credits paid in cash, memorandum accounts, and general collection rules.

If you’re a beneficiary, some amounts might not be counted as part of your dividend income.

Sometimes, the law might treat an imputation credit as not being part of a dividend. This can happen if there are special arrangements for paying dividends by other companies.

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Next up: CD 16: Certain dividends not increased by tax credits

or “Some dividends from unit trusts don't include tax credits”
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Part C Income
Income from equity

CD 15Tax credits linked to dividends

  1. The amount of a dividend includes—

  2. an imputation credit attached to the dividend subject to any limitation to the imputation credit made under section LE 5 where the person is a beneficiary:
    1. an amount of RWT or NRWT, as applicable, withheld from or paid in relation to the dividend.

      1. Subsection (1) is overridden by sections CD 16 and CD 17.

      2. Subsection (1) does not apply in—

      3. Part L (Tax credits and other credits), except for subpart LP (Tax credits for supplementary dividends); or
        1. Part M (Tax credits paid in cash); or
          1. Part O (Memorandum accounts); or
            1. Part R (General collection rules).

              1. Despite subsection (1)(b) and for the purposes of section HC 6 (Beneficiary income), an amount excluded from beneficiary income under section HC 6(2)(c) is not included in the amount of a dividend.

              2. Section GB 37 (Arrangements for payment of dividend by other companies) may apply to treat an imputation credit as not being included in the amount of a dividend.

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              Notes
              • Section CD 15(1) heading: replaced, on , by section 10(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
              • Section CD 15(1): replaced, on , by section 10(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
              • Section CD 15(1)(a): amended (with effect on 1 April 2008), on , by section 12(1) (and see section 12(2) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
              • Section CD 15(3B) heading: inserted, on (with effect on 1 April 2008), by section 10(2) (and see section 10(4) for application) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
              • Section CD 15(3B): inserted, on (with effect on 1 April 2008), by section 10(2) (and see section 10(4) for application) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
              • Section CD 15 list of defined terms FDP credit: repealed, on , by section 17(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
              • Section CD 15 list of defined terms NRWT: inserted, on , by section 10(3) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
              • Section CD 15 list of defined terms pay: inserted, on , by section 10(3) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
              • Section CD 15 list of defined terms RWT: inserted, on , by section 10(3) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
              • Section CD 15 list of defined terms RWT substitution payment: inserted, on , by section 10(3) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
              • Section CD 15 list of defined terms tax credit: inserted, on , by section 10(3) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).