Double taxation relief applicable to dividends

(1) Where the tax paid or payable by a company is affected by double relief, the amount to be set off under section 51 to be repaid under section 61 of this Act, in respect of the tax deductible from any dividend paid by the company shall be reduced as follows– (a) if no tax is chargeable on the recipient in respect of the dividend, the reduction shall be an amount equal to tax on the gross dividend 52 at the rate of double taxation relief applicable thereto; (b) if the rate of tax chargeable on the recipient in respect of the dividend is less than the rate of double taxation relief applicable to the dividend, the reduction shall be an amount equal to tax on the gross dividend at the difference between those two rates. (2) For the purposes of this section– (a) if the income of the person chargeable includes one dividend such as is mentioned in sub-section (1) of this section, that dividend shall be deemed to be the highest part of his (b) if his income includes more than one such dividend, a dividend shall be deemed to be a higher part of his income than another dividend if the net Colonial rate applicable to the former dividend is lower than that applicable to the latter dividend; (c) where tax is chargeable at different rates in respect of different parts of any such dividend, or where tax is chargeable in respect of some part of any such dividend and is not chargeable in respect of some other part thereof, each part shall be deemed to be a separate dividend; (d) the expression “double taxation relief” has the same meaning as in section 22 of this Act, and the expression “the rate of double taxation relief” means the rate which represents the excess of the rate of tax deductible from the dividend over the net Colonial rate applicable thereto.