Corporation Tax Act 2010

Distributions, other than dividends, in respect of shares

1002 Exceptions for certain transfers of assets or liabilities between a company and its members

(1) No transfer of assets (other than cash) or of liabilities between one company and another constitutes, or is treated as giving rise to, a distribution by virtue of paragraph B in section 1000(1) if—

(a) both the companies are UK resident,

(b) neither of them is a 51% subsidiary of a non-UK resident company, and

(c) the two companies are not under common control, either at the time of the transfer or as a result of it.

(2) Subsection (3) applies if—

(a) on a transfer of assets or liabilities by a company to its members, or to a company by its members, a member receives a benefit,

(b) the conditions in section 1021(1)(a) and (b) are met, and

(c) if those conditions were not met, an amount would be a distribution under section 1020(2) (transfers of assets or liabilities treated as distributions).

(3) The amount mentioned in subsection (2)(c) is not a distribution by virtue of paragraph B in section 1000(1).

(4) In this section—

• “under common control” means under the control of the same person or persons, and

• “control” has the same meaning as in Part 10 (see sections 450 and 451).