Corporation Tax Act 2009 section 1285

UK company distributions

Section 1285 exempts dividends and other distributions received from UK resident companies from the charge to corporation tax, while clarifying that this exemption applies only to income computations and not to chargeable gains.

• Dividends and other distributions received from a UK resident company are not brought into account as receipts when computing income for corporation tax purposes.
• This exemption applies only to the income computation — it does not prevent a distribution amount from being included in a chargeable gains calculation.
• The exemption relates to the receipt side only; there is a separate rule (in section 1305) that denies a deduction for dividends and distributions paid out.
• There are certain exceptions to this general exemption, which are signposted within the section itself.