C2C3F1Part 9ACompany distributions
Pt. 9A modified (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 787, 795, 1184(1) (with Sch. 2)
Pt. 9A modified by 2010 c. 4, s. 814D(6) (as inserted (with effect in accordance with Sch. 29 para. 51 of the amending Act) by Finance Act 2013 (c. 29), Sch. 29 para. 2)
Chapter 4Supplementary
Election that distribution should not be exempt
C1931RElection that distribution should not be exempt
1
This section applies where, apart from this section, a distribution (“the distribution”) would be exempt.
2
If the recipient so elects, the distribution is not exempt.
3
An election under this section must be made on or before the second anniversary of the end of the accounting period in which the distribution is received.
4
Subsection (5) applies where the distribution is a dividend that is treated for certain purposes of Part 18 of ICTA (double taxation relief) as two separate dividends by virtue of section 801C of that Act (separate streaming of dividend so far as representing an ADP dividend of a CFC).
5
If the recipient so elects—
a
the distribution is to be treated for the purposes of this Part as if it were an ADP dividend and a separate residual dividend as provided for in that section of that Act, and
b
the ADP dividend is not exempt.
6
The reference in subsection (4) to section 801C of ICTA is to that section as it continues to have effect in accordance with paragraph 8(1) of Schedule 16 to FA 2009 in relation to dividends paid on or after 1 July 2009 for accounting periods beginning before that day.
F3Chargeable gains
S. 931RA and cross-heading inserted (with effect in accordance with Sch. 3 paras. 5, 7 of the amending Act) by Finance (No. 3) Act 2010 (c. 33), Sch. 3 para. 3(4)
931RAChargeable gains
The fact that a dividend or other distribution is exempt does not prevent it from being taken into account in the calculation of chargeable gains.
Interpretation
931SMeaning of “small company”
1
For the purposes of this Part a company is a “small company” in an accounting period if it is in that period a micro or small enterprise, as defined in the Annex to Commission Recommendation 2003/361/EC of 6 May 2003.
2
But a company is not a “small company” in an accounting period if it is at any time in that period—
a
an open-ended investment company,
b
an authorised unit trust scheme,
c
an insurance company, or
d
a friendly society.
3
In subsection (2)—
“open-ended investment company” has the meaning given by section 236 of FISMA 2000;
“authorised unit trust scheme” means a unit trust scheme (within the meaning given by section 237 of FISMA 2000) in relation to which a order under section 243 of that Act (authorisation orders) is in force;
“insurance company” has the meaning given by F5section 65 of FA 2012;
“friendly society” has the meaning given by F6section 172 of FA 2012.
931TMeaning of “payer”, “recipient” and “relevant person”
In this Part—
“the payer”, in relation to a distribution, means the company that makes the distribution;
“the recipient”, in relation to a distribution, means the company that receives the distribution;
“a relevant person”, in relation to a distribution, means—
- a
the company that receives the distribution, or
- b
any person connected with that company.
- a
931UMeaning of “ordinary share” and “redeemable”
1
In this Part “ordinary share” means a share that does not carry any present or future preferential right to dividends or to a company's assets on its winding up.
2
A share is regarded as “redeemable” for the purposes of this Part only if it is redeemable as a result of its terms of issue (or any collateral arrangements)—
a
requiring redemption,
b
entitling the holder to require redemption, or
c
entitling the issuing company to redeem.
931VMeaning of “scheme” and “tax advantage scheme”
“
For the purposes of this Part—
“scheme” includes any scheme, arrangements or understanding of any kind whatever, whether or not legally enforceable, involving a single transaction or two or more transactions;
“tax advantage scheme” means a scheme the main purpose, or one of the main purposes, of which is to obtain a tax advantage (other than a negligible tax advantage).
2
In this section “tax advantage” has the meaning given by F2section 1139 of CTA 2010.
Boundary provisions
931WProvisions which must be given priority over this Part
1
Any income so far as it falls within—
a
this Part, and
b
Chapter 2 of Part 3 (income taxed as trade profits),
is dealt with under Part 3.
2
Any income so far as it falls within—
a
this Part, and
b
Chapter 3 of Part 4 (profits of property businesses) so far as the Chapter relates to a UK property business,
is dealt with under Part 4.
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Pt. 9A inserted (with effect in accordance with Sch. 14 para. 31 of the amending Act) by Finance Act 2009 (c. 10), Sch. 14 para. 1 (with Sch. 14 para. 32)