Taxes Consolidation Act 1997 section 753D

Refund of dividend withholding tax

Section 753D sets out the conditions under which a stock seller may claim a refund of dividend withholding tax (DWT) that was deducted from a dividend received by a stock buyer in the course of a stock lending or repurchase agreement transaction.

• Where a stock buyer receives a dividend subject to DWT under a stock lending or repo transaction and pays the net amount to the stock seller as a manufactured payment, the stock seller may claim a DWT refund from Revenue provided six specified conditions are all met.
• The key conditions include that the stock return has taken place, the stock seller would have been entitled to a DWT exemption or repayment had they received the dividend directly, the stock seller has not been compensated for the DWT by the stock buyer or a connected party, and the stock buyer has no entitlement to claim relief for that DWT.
• To make a claim, the stock seller must provide confirmation of the transaction details, a signed declaration from the stock buyer, proof of ownership of the securities before and after the transaction, a dividend voucher or eVoucher, the relevant DWT exemption declaration, and any other documentation Revenue may require.
• Taxpayers should also check that the refund amount is not restricted by the anti-hybrid rules in section 835AO, which can neutralise relief for withholding tax where hybridity would otherwise give rise to relief for more than one party.