Statement of Practice E15
Published 1 April 1975
© Crown copyright 1975
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This statement clarifies the position concerning dividend payments and transfers of assets from a subsidiary company to a parent or sister company as appropriate.
Whether or not a disposition is a transfer of value for Capital Transfer Tax or Inheritance Tax purposes has to be determined by reference to Inheritance Tax Act (IHTA) 1984 section 3(1), (2) and section 10 provides that a disposition is not a transfer of value if it was not intended to confer any gratuitous benefit on any person, subject to the other provisions of that subsection.
In the Commissioners for HM Revenue and Customs view, the effect is that a dividend paid by a subsidiary company to its parent is not a transfer of value and so IHTA 1984 section 94 does not start to operate in relation to such dividends. Nor do the Commissioners feel that they can justifiably treat a transfer of assets between a wholly-owned subsidiary and its parent or between 2 wholly-owned subsidiaries as a transfer of value.
First publication
British tax review 1975 page 139.