Corporation Tax Act 2010 section 740

Abnormal dividends: general

Section 740 defines when a dividend received by a company is treated as "abnormal" for the purposes of the transactions in securities rules, and identifies who has the authority to make that determination.

• A dividend is treated as abnormal if the appropriate authority is satisfied that the excessive return condition is met (applicable to any dividend) or, for fixed-rate dividends only, that the excessive accrual condition is met.
• The excessive return condition is set out in section 741, and the excessive accrual condition is set out in section 742.
• The "appropriate authority" making the determination can be an officer of Revenue and Customs, the Commissioners for HMRC, or the tribunal.
• In practice, HMRC restricts the exercise of these functions to a small group of specialist officers, even though the legislation refers more broadly to any officer of Revenue and Customs.