Corporation Tax Act 2010 section 1082

Conditions for distributions within section 1076(a)

Section 1082 sets out additional conditions (Conditions E and F) that must be met when a demerger involves a company distributing shares in one or more of its 75% subsidiaries directly to its own members.

• The shares distributed must not be redeemable and must represent substantially all of the distributing company's ordinary share capital and voting rights in the subsidiary (Condition E).
• After the distribution, the distributing company must remain either a trading company or the holding company of a trading group (Condition F).
• Condition F does not apply if the distributing company is itself a 75% subsidiary of another company.
• Condition F also does not apply where the distributing company transfers shares in two or more 75% subsidiaries and is then dissolved with no remaining net assets available for distribution.

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