Corporation Tax Act 2009

465 Exclusion of distributions except in tax avoidance cases

(1) Credits or debits relating to any amount falling, when paid, to be treated as a distribution must not be brought into account for the purposes of this Part, except, in the case of credits, so far as they are avoidance arrangement amounts (see subsection (4)).

(2) Nothing in section 464(1) prevents amounts that are not brought into account because of subsection (1) from being brought into account for corporation tax purposes otherwise than under this Part.

(3) But see the following provisions (under which some amounts are prevented from being distributions for corporation tax purposes and accordingly are within this Part)—

(a) section 523(2)(b) (shares subject to outstanding third party obligations and non-qualifying shares),

(b) section 209(6A) of ICTA (relevant alternative finance return under alternative finance arrangements),

(c) section 477A(3)(b) of ICTA (building society dividends etc), and

(d) section 486(1) and (9) of ICTA (dividends, bonuses and other sums payable to shareholders in registered industrial and provident societies and UK agricultural or fishing co-operatives).

(4) For the purposes of this section an amount is an avoidance arrangement amount if it arises in consequence of, or otherwise in connection with, arrangements of which the purpose, or one of the main purposes, is securing a tax advantage for any person.

(5) In this section “arrangements” includes any scheme, agreement or understanding, transaction or series of transactions.