Part 3Trading income

Chapter 9Trade profits: other specific trades

Dealers in securities etc

130Traders receiving distributions etc

1

A receipt of a trade which is—

a

a UK distribution, or

b

a payment representative of a UK distribution,

is brought into account in calculating the profits of the trade.

2

Subsection (1) is an exception to section 1285(2) (under which UK company distributions are not generally taken into account in calculating income).

3

Subsection (4) applies if—

a

a payment made by a company carrying on a trade is representative of a UK distribution, and

b

but for section 1305(1) (company’s profits to be computed without any deduction for distributions), a deduction would be allowed for the payment in calculating the profits of the trade.

4

A deduction is allowed for the payment in calculating the profits of the trade (despite section 1305(1)).

5

Subsections (1) to (4) do not apply to receipts, or payments, in the course of insurance business or any category of insurance business.

6

In this section “UK distribution” means a distribution made by a UK resident company.