Corporation Tax Act 2010 (c. 4)

Part 23 U.K. Company distributions

Chapter 2 U.K. Matters which are distributions

Transfers of assets or liabilities treated as distributions U.K.

1020 Transfers of assets or liabilities treated as distributions U.K.

(1) This section applies if on a transfer of assets or liabilities—

(a) by a company to its members, or

(b) to a company by its members,

the amount or value of the benefit received by a member exceeds the amount or value of any new consideration given by the member.

(2) The company is treated for the purposes of the Corporation Tax Acts as making a distribution to the member of an amount equal to the excess.

F1 ...

[F2 (2A) But the company is not treated as making a distribution under subsection (2) if the transfer of assets or liabilities—

(a) is a distribution by virtue of paragraph B in section 1000(1), or

(b) would be such a distribution in the absence of sub-paragraph (a) of that paragraph (distribution representing repayment of capital on the shares).]

(3) For the purposes of subsection (1) the amount or value of a benefit, or of any consideration, is determined in accordance with the market value.

Textual Amendments

F1 Words in s. 1020(2) omitted (with effect in accordance with s. 33(6) of the amending Act) by virtue of Finance Act 2012 (c. 14), s. 33(3)(a)

F2 S. 1020(2A) inserted (with effect in accordance with s. 33(6) of the amending Act) by Finance Act 2012 (c. 14), s. 33(3)(b)

F3 1021 Section 1020: exceptions U.K.

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Textual Amendments

F3 S. 1021 repealed (with effect in accordance with s. 33(6) of the amending Act) by Finance Act 2012 (c. 14), s. 33(4)