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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
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Capital distributions: introduction

TCGA92/S122

A capital distribution is any distribution from a company which is not treated as income for income tax purposes. Most distributions, for example, dividend payments, will be income distributions. The capital distributions you are most likely to see in practice are distributions in the course of a winding-up. The sale of provisional letters of allotment in a rights issue is also treated as a capital distribution. Certain distributions made in the course of a demerger are deemed not to be capital distributions.