Finance Act 2006

122 Distributions: deduction of tax

(1) The Treasury may make regulations providing for the assessment, collection and recovery of tax where—

(a) a company to which this Part applies makes a distribution of profits of C (tax-exempt), and

(b) tax is or may become chargeable in respect of the distribution (whether by virtue of section 121(1) or otherwise).

(2) Regulations under this section may, in particular—

(a) require a company to deduct tax at the basic rate before payment of distributions;

(b) specify classes of shareholder to whom distributions may be made without deduction of tax;

(c) make provision about the calculation of payments of tax to be made by a company;

(d) require a company to account for tax deducted;

(e) apply an enactment (with or without modification) in respect of cases where tax is deducted or treated as deducted from income;

(f) specify the time at which a distribution is to be treated as made by a company;

(g) specify periods in respect of which payments of tax are to be made;

(h) specify times at which payments of tax are to be made;

(i) make provision about the making of claims and determinations in respect of over-payment or under-payment (which may include provision for appeals);

(j) include provision requiring the payment of interest in respect of late payments of tax (which may—

(i) provide for payment without deduction of tax;

(ii) allow interest paid as a deduction from profits of the company’s tax-exempt business);

(k) require a company to provide a shareholder with a certificate containing specified information;

(l) make provision about the repayment to a shareholder of sums deducted and paid to the Commissioners in respect of tax;

(m) make provision for the payment of interest in respect of repayments under paragraph (l);

(n) require notices to be given by or to a company;

(o) require a company to make returns;

(p) require a company to make records available to the Commissioners for inspection.

(3) A reference in subsection (2) to a distribution in respect of profits of tax-exempt business includes a distribution made after this Part has ceased to apply to a company.

(4) A distribution which is treated as having been made by virtue of section 107(9)(b) shall also be treated as having been made for the purposes of regulations under this section.

(5) In this section “profits” includes gains.