Part 23 Company distributions

Chapter 2 Matters which are distributions

Distributions, other than dividends, in respect of shares

1002 Exceptions for certain transfers of assets or liabilities between a company and its members
(1) No transfer of assets (other than cash) or of liabilities between one company and another constitutes, or is treated as giving rise to, a distribution by virtue of paragraph B in section 1000(1) if—
(a) both the companies are UK resident,
(b) neither of them is a 51% subsidiary of a non-UK resident company, and
(c) the two companies are not under common control, either at the time of the transfer or as a result of it.
(2) Subsection (3) applies if—
(a) on a transfer of assets (other than cash) or of liabilities by a company to its members, or to a company by its members, a member receives a benefit,
Words in s. 1002(2)(a) substituted (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. 1(2)
(b) the conditions in section 1021(1)(a) and (b) are met, and
(c) if those conditions were not met, an amount would be a distribution under section 1020(2) (transfers of assets or liabilities treated as distributions).
(3) The amount mentioned in subsection (2)(c) is not a distribution by virtue of paragraph B in section 1000(1).
(4) In this section—
“under common control” means under the control of the same person or persons, and
“control” has the same meaning as in Part 10 (see sections 450 and 451).