Corporation Tax Act 2009 section 931B

Exemption from charge to tax

Section 931B sets out the conditions under which dividends or other distributions received by a small company are exempt from corporation tax.

• The company paying the distribution must be resident solely in the UK or a qualifying territory — it cannot be dual-resident in more than one jurisdiction
• The distribution must not be certain types of non-dividend distribution, such as interest recharacterised as a distribution (for example, interest paid at more than a commercial rate)
• No tax deduction must be available to anyone outside the UK in respect of the distribution under the law of any foreign territory
• The distribution must not be made as part of a scheme designed to obtain a tax advantage