Income Tax Act 2007 section 700

Timing of assessments

Section 700 establishes the rule for determining the correct tax year in which an income tax assessment must be made when HMRC issues a counteraction notice in cases involving the repayment of share capital that gives rise to an income tax advantage.

• This section applies where a person has obtained or is in a position to obtain an income tax advantage through the repayment of share capital, as identified under the transactions in securities rules
• Any income tax assessment issued under a counteraction notice must be made for the tax year in which the share capital repayment actually occurs
• The concept of repayment of share capital extends to any distribution made in respect of shares during a company's winding up or dissolution
• For these purposes, "shares" is broadly defined to include stock and any other interest that a member holds in a company