Distribution exemption—distributions from controlled companies on or after 1 January 2013
Produced in partnership with Michael McGowan
Practice notesDistribution exemption—distributions from controlled companies on or after 1 January 2013
Produced in partnership with Michael McGowan
Practice notesA non-small company is subject to corporation tax on a distribution received unless, among certain other requirements, the distribution falls within an exempt class.
There are five exempt classes of distribution:
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distributions from controlled companies, which is explained further in this Practice Note (for distributions received before 1 January 2013, see Practice Note: Distribution exemption—controlled companies before 1 January 2013 [Archived])
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distributions in respect of non-redeemable ordinary shares
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distributions in respect of portfolio holdings
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distributions derived from transactions not designed to reduce tax, and
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dividends in respect of shares accounted for as liabilities
For further information on the tax charge on distributions see Practice Note: How are non-small companies taxed on distributions received? For information on the exemptions applicable to small companies, see Practice Note: How are small companies taxed on distributions received? and for information on what a small company is, see Practice Note: What is a small company for the purposes of the distribution exemption?
The exemption
A distribution falls within the exemption applicable to
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