Corporation Tax Act 2010 section 1002

Exceptions for certain transfers of assets or liabilities between a company and its members

Section 1002 provides two exceptions where transfers of assets or liabilities between a company and its members are excluded from being treated as distributions under the general distribution rules.

• This section carves out two specific circumstances from the definition of distributions under paragraph B in section 1000 of the Corporation Tax Act 2010.
• The first exception (in subsection (1)) disapplies the distribution treatment for certain transfers between a company and its members, and is linked to the interpretive provisions in section 1021(1), (2) and (3).
• The second exception (in subsection (2)) provides a further exclusion, with its own qualifying conditions set out in section 1021(4).
• In both cases, the qualifying conditions and interpretive rules are located in section 1021, which should be read alongside this section to understand the full scope of the exceptions.

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