Distributions: general: companies not carrying on a business
CTA10/S1071 applies where a company has never carried on a trade or a business of holding investments.
The distributions legislation applies to such a company only in respect of distributions that are made out of:
- profits that are charged to CT (less the CT on those profits),
- franked investment income,
This provision is important in relation to distributions of unincorporated associations (see CTM15540) which are not carrying on a business of mutual trading (see BIM24000 onwards).