Corporation Tax Act 2010 section 736

Receipt of consideration representing company's assets, future receipts or trading stock (circumstance C)

Section 736 sets out one of the specific circumstances (circumstance C) in which a company may be caught by the anti-avoidance rules on transactions in securities, where it receives consideration connected to a company's assets, future receipts or trading stock and an abnormal dividend is involved.

• A company ("A") receives consideration representing the value of another company's distributable assets, future receipts, or trading stock
• The receipt arises from a transaction whereby another person subsequently receives, or has received, an abnormal amount by way of dividend
• Company A does not pay or bear corporation tax on the income represented by the consideration, apart from the rules in this Part
• Assets representing a return of sums paid by subscribers on the issue of securities are excluded, even if they would be distributable under the laws of the company's country of incorporation