Corporation Tax Act 2010 section 1000

Meaning of "distribution"

Section 1000 defines what counts as a "distribution" for corporation tax purposes, covering dividends, returns of value to shareholders, and various other payments or transactions by a company.

• A distribution includes any dividend (including a capital dividend) and any other return of assets to shareholders beyond a simple repayment of the capital they originally subscribed or new consideration the company receives.
• Issuing redeemable share capital or securities to existing shareholders without receiving new consideration in return also counts as a distribution.
• Interest or payments on non-commercial securities or special securities are treated as distributions, except to the extent they represent repayment of the principal or (for non-commercial securities) a reasonable commercial return on that principal.
• Certain asset or liability transfers, bonus share issues following a repayment of share capital, specific expenses of close companies, and arrangements within 90% groups can also be treated as distributions.