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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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Distributions: general: disapplication of the distribution provisions

CTA10/S1002 and S1021

For distributions made before 17 July 2012, CTA10/S1002 and S1021 disapply the distributions provisions, but in different circumstances.

CTA10/S1021 (1) says that CTA10/S1020 does not apply where:

  • the company and the member receiving the benefit of the transaction are both UK resident companies which are bodies corporate and either
  • the company giving the benefit is a subsidiary of the recipient, or
  • both companies are subsidiaries of a third UK resident company.

Any amount that would be a distribution but for CTA10/S1021 (1) cannot be a distribution under CTA10/S1000 (1) B.

CTA10/S1002 (1) and S1021 (4) prevent certain transactions being distributions under either CTA10/S1000 (1) B or G. It applies to transfers of assets (other than cash), or of liabilities, between companies where

  • both are UK residents, neither of which is a 51 per cent subsidiary (CTA10/S1154 (1) to (4)) of a non-UK resident company,


  • the two companies are not under common control (CTA10/S450), either at the time of the transfer or as a result of it.
  • CTA10/S1002 and S1021 were repealed for distributions made on or after 17 July 2012.