Corporation Tax Act 2010 section 1030B

Section 1030A: effect of company not being dissolved, etc.

Section 1030B deals with what happens when a distribution that was previously treated as not being a distribution under section 1030A loses that favourable treatment because the company was not dissolved within two years, or failed to collect its debts or settle its liabilities.

• If two years pass after a distribution and the company has still not been dissolved, the capital treatment under section 1030A is reversed
• The reversal also applies if the company failed to collect all amounts reasonably due to it, or failed to pay off all its debts and liabilities
• Once reversed, the distribution is treated for corporation tax purposes as if the section 1030A relief had never applied — meaning it reverts to being taxed as a normal distribution
• HMRC will make all necessary adjustments, including issuing revised assessments, to give effect to this reversal