ACT: General: Qualifying and non-qualifying distributions
You should check the other guidance available on GOV.UK from HMRC as Brexit updates to those pages are being prioritised before manuals.
However, the following are non-qualifying distributions.
- A distribution of certain bonus redeemable share capital and bonus securities, which in relation to the company making it is a distribution by virtue only of ICTA88/S209 (2)(c) (see CTM15450 and CTM20075).
- Company A may make a distribution of bonus share capital or securities directly or indirectly to Company B. This may be a distribution by virtue only of ICTA88/S209 (2)(c). If Company B later distributes that same share capital or securities this later distribution is also a non-qualifying distribution.
The amount of the distribution for the purposes of ICTA88/S209 (2)(c) is:
- for redeemable share capital, the excess of the nominal amount of the share capital together with any premium payable on redemption or in a winding-up or in any other circumstances over any new consideration received,
- for any security, the excess of the principal amount secured including any premium payable at maturity or in a winding-up or in any other circumstances over any new consideration received.
As regards the treatment of qualifying and non-qualifying distributions: