Corporation Tax Act 2010 section 811

Arrangements between companies to make distributions

Section 811 extends the meaning of "distribution" to cover arrangements where two or more companies agree to make distributions to each other's shareholders.

• Where two or more companies arrange to make distributions to each other's members, the distributions are treated as linked and brought within the wider definition of "distribution" for corporation tax purposes.
• The section targets reciprocal arrangements — for example, where Company A distributes to Company B's shareholders and Company B distributes to Company A's shareholders — ensuring these cannot be used to circumvent the tax rules on distributions.
• The effect is that such cross-distributions are treated in the same way as if each company had made a distribution directly to its own members, preventing any tax advantage from the arrangement.
• This provision applies regardless of the form the distributions take, so long as the arrangement involves two or more companies acting in concert to channel value to each other's shareholders.