753 Restriction on relief for losses by repayment of tax in cases of dividends paid out of accumulated profits

Dividend stripping by non-financial concerns with trading losses are prevented by this section.

Where in any year of assessment, or where appropriate, accounting period a person carries on a non-financial trade and receives a dividend of the kind referred to in section 752, then in determining any repayment of tax due as a result of set off of trading losses, the “stripped” dividend taken by such a concern is to be left out of account. Similarly any tax credit attaching to such dividends is disregarded (this aspect is no longer relevant as tax credits do not attach to distributions made on or after 6 April 1999).

Relevant Date: Finance Act 2021