Clause 8

by inserting, immediately after subsection (4), the following subsections:“(4A) Where an amount of dividends exempt from tax under subsection (4) has been received by a shareholder which is a holding company, such amount shall be credited to a designated account to be kept by the holding company for the purposes of this section.(4B) Where the designated account is in credit at the date on which any dividends are paid by the holding company out of the income which has been credited to the designated account, an amount equal to such dividends or to the credit in that account, whichever is the less, shall be debited to the designated account.(4C) So much of the amount of any dividends debited to the designated account as is received by a shareholder of the holding company shall, if the Comptroller is satisfied with the entries in the designated account, be exempt from tax in the hands of the shareholder.”;

by deleting subsection (6) and substituting the following subsection:“(6) Where an amount of dividends exempt from tax under subsection (4C) has been received on or after 1st March 1995 by a shareholder which is a relevant holding company, any dividends paid by the relevant holding company to its shareholders, to the extent that the Comptroller is satisfied that those dividends are paid out of such amount, shall be exempt from tax in the hands of those shareholders.”;

by deleting the words “subsections (4)” in subsection (7) and substituting the words “subsections (4), (4C)”;

by inserting, immediately after the word “account” in subsections (8) and (9)(b), the words “or designated account, as the case may be,”;

by deleting the words “subsection (6),” in the third line of subsection (9) and substituting the words “subsection (4A) and a relevant holding company under subsection (6),”;

by inserting, immediately after the definition of “foreign tax” in subsection (10), the following definitions:“ “holding company” means a company which owns not less than 50% beneficial interest in the issued share capital of the company paying the dividends at the time such dividends are received, and includes a company approved under subsection (13);“relevant holding company” means any holding company of another holding company;”; and

by inserting, immediately after subsection (11), the following subsections:“(12) Subsections (4A) to (11) shall apply, mutatis mutandis, to any dividends received by a relevant holding company where the Comptroller is satisfied that such dividends are paid out of any income exempt under this section.(13) For the purposes of this section, the Minister or such person as he may appoint may approve as a holding company any company which owns less than 50% beneficial interest in the issued share capital of the company paying the dividends at the time such dividends are received by the company.”.