Corporation Tax Act 2009 section 931E

Distributions from controlled companies

Section 931E provides an exemption from corporation tax for dividends and other distributions received by a company that controls the company making the distribution, including certain joint venture arrangements.

• A dividend or distribution is exempt if the recipient company controls the company paying the distribution
• Exemption also applies where two persons together control the payer, provided each holds at least 40% of the relevant interests, rights and powers
• In the joint control scenario, the second person's share must be at least 40% but no more than 55% of the relevant holdings, rights and powers
• The meaning of "control" follows the controlled foreign company (CFC) rules in the Taxation (International and Other Provisions) Act 2010