(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.