Corporation Tax Act 2010 section 1032

Interest etc. paid in respect of certain securities

Section 1032 provides that certain interest or other distributions paid between companies in respect of special securities are not treated as distributions for corporation tax purposes.

• Where one company pays interest or another distribution to a company within the charge to corporation tax in respect of special securities, that payment is not treated as a distribution for corporation tax purposes
• This exclusion does not apply where the payment falls within the rules for non-commercial securities under paragraph E in section 1000(1)
• The exclusion is also disapplied where the receiving company is entitled under any legislation to an exemption from tax on the interest or distribution in question
• Transitional savings exist under Schedule 2 for certain obligations entered into before 9 March 1982, or before 1 July 1982 where negotiations were already in progress before 9 March 1982