Classification of certain corporate distributions as capital
2
1
A receipt consisting of a tax-exempt corporate distribution is to be treated for the purposes of any trust to which this section applies as a receipt of capital (even if it would otherwise be treated for those purposes as a receipt of income).
2
Subsection (1) has effect subject to any contrary intention that appears—
a
in any trust instrument of the trust, and
b
in any power under which the trust is created or arises.
3
The following are tax-exempt corporate distributions for the purposes of this section and section 3—
a
a distribution that is an exempt distribution by virtue of section 1076, 1077 or 1078 of the Corporation Tax Act 2010, and
b
any other distribution of assets (in any form) by a body corporate, where the distribution is of a description specified by an order made by the Secretary of State by statutory instrument.
4
An order under subsection (3)(b) may specify a description of distribution only if neither income tax nor capital gains tax is chargeable in respect of a distribution of that description.
5
A statutory instrument containing an order under subsection (3)(b) is subject to annulment in pursuance of a resolution of either House of Parliament.
6
This section applies to any trust, whether created or arising before or after this section comes into force.