Corporation Tax Act 2010

736 Receipt of consideration representing company’s assets, future receipts or trading stock (circumstance C)

(1) This section applies in relation to a company (“A”) if subsections (2) to (4) apply.

(2) A receives consideration which—

(a) is or represents the value of—

(i) assets which are available for distribution by a company by way of dividend, or

(ii) assets which would have been so available apart from anything done by the company,

(b) is received in respect of future receipts of a company, or

(c) is or represents the value of trading stock of a company.

(3) The receipt is in consequence of a transaction whereby another person subsequently receives, or has received, an abnormal amount by way of dividend (see section 740).

(4) The receipt of the consideration is such that A does not pay or bear corporation tax on income in respect of it (apart from this Part).

(5) The assets mentioned in subsection (2) do not include assets which are shown to represent a return of sums paid by subscribers on the issue of securities, despite the fact that under the law of the country in which the company is incorporated assets of that description are available for distribution by way of dividend.

(6) In this section references to the receipt of consideration include references to the receipt of any money or money’s worth.