Corporation Tax Act 2010 section 737

Receipt of consideration in connection with relevant company distribution (circumstance D)

Section 737 describes "Circumstance D" under the transactions in securities rules, which applies where a company receives consideration connected with the distribution or realisation of a relevant company's assets, and that consideration effectively represents distributable profits, future receipts, or trading stock, without bearing corporation tax on the amount received.

• The section applies where a company (the "section 733 company") receives consideration in connection with the distribution, transfer, realisation, or application of assets of a relevant company in discharge of liabilities.
• The consideration must represent the value of assets available for distribution as dividends (or which would have been available but for actions taken by the relevant company), future receipts of the relevant company, or the value of its trading stock.
• The company receives the consideration in such a way that, apart from this Part of the Act, it does not pay or bear corporation tax on income in respect of it.
• Assets representing a return of sums paid by subscribers on the issue of securities are excluded, even if they are legally available for dividend distribution in the relevant company's country of incorporation.