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(1)     ITA 2007 is amended in accordance with subsections (2) to (8).

(2)     In section 6(3)(b) (other rates: dividends), before “dividend ordinary rate,” insert “dividend nil rate,”.

(3)     In section 8 (dividend ordinary, upper and additional rates)—

“(A1)     The dividend nil rate is 0%.”,

(4)     In section 9(2) (dividend trust rate), for “37.5%” substitute “38.1%”.

(5)     After section 13 insert—

“13A Income charged at the dividend nil rate

(1)     Subsection (2) applies if, ignoring this section, at least some of an individual's income would be charged to income tax at the dividend ordinary rate, the dividend upper rate or the dividend additional rate.

(2)     Income tax is charged at the dividend nil rate (rather than the dividend ordinary rate, dividend upper rate or dividend additional rate) on one or more amounts of the individual's income as follows—