Part 13

Tax avoidance
Chapter 1

Transactions in securities

Circumstances in which income tax advantages obtained or obtainable

Receipt of consideration in connection with relevant company distribution (circumstance D)
689
1
This section applies in relation to a person if subsections (2) to (4) apply.
2
The person receives consideration in connection with—
a
the distribution, transfer or realisation of assets of a relevant company (see section 691), or
b
the application of such assets in discharge of liabilities.
3
The consideration—
a
is or represents the value of—
i
assets which are available for distribution by way of dividend by the company, 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 the company, or
c
is or represents the value of trading stock of the company.
4
The person so receives the consideration that the person does not pay or bear income tax on it (apart from this Chapter).
5
The assets mentioned in subsection (3) 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.