Trusts (Capital and Income) Act 2013

2 Classification of certain corporate distributions as capital

(1) A receipt consisting of a tax-exempt corporate distribution is to be treated for the purposes of any trust to which this section applies as a receipt of capital (even if it would otherwise be treated for those purposes as a receipt of income).

(2) Subsection (1) has effect subject to any contrary intention that appears—

(a) in any trust instrument of the trust, and

(b) in any power under which the trust is created or arises.

(3) The following are tax-exempt corporate distributions for the purposes of this section and section 3—

(a) a distribution that is an exempt distribution by virtue of section 1076, 1077 or 1078 of the Corporation Tax Act 2010, and

(b) any other distribution of assets (in any form) by a body corporate, where the distribution is of a description specified by an order made by the Secretary of State by statutory instrument.

(4) An order under subsection (3)(b) may specify a description of distribution only if neither income tax nor capital gains tax is chargeable in respect of a distribution of that description.

(5) A statutory instrument containing an order under subsection (3)(b) is subject to annulment in pursuance of a resolution of either House of Parliament.

(6) This section applies to any trust, whether created or arising before or after this section comes into force.