793. Capital distributions.

A company makes a capital distribution if it makes any distribution in money or money's worth which would not be treated as income in the hands of the recipient for purposes of income tax1. A capital distribution is a disposal or part disposal of the shares held, the consideration being the amount received by the shareholder2. Taxable capital distributions commonly include distributions in liquidation, repayment of share capital and repurchase by a company of its own share capital.