Corporation Tax Act 2010 section 1073

Key terms etc.

Section 1073 provides a directory of the key terms used in the demergers chapter and highlights an additional rule about chargeable payments made after an exempt distribution.

• The chapter uses five key defined terms: "chargeable payment", "company concerned in an exempt distribution", "the distributing company", "exempt distribution", and "relevant company", each defined elsewhere in the legislation.
• The distributing company is the company making the demerger distribution, while a relevant company is one that meets certain criteria in connection with the demerger.
• An exempt distribution is one that qualifies for favourable tax treatment under the demerger provisions, and a chargeable payment is broadly a payment that could jeopardise that treatment.
• Where a chargeable payment is made within five years after an exempt distribution, a separate rule provides that it must not be treated as a repayment of capital for certain purposes.