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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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Residence: non-resident companies: securities in respect of which distributions may arise

The types of security in respect of which distributions may arise (see CTM15500) include securities issued by a company and held by its parent company or fellow subsidiary where the parent or fellow subsidiary is not resident in the UK. (This does not apply, however, where 90 per cent or more of the share capital of the issuing company is directly owned by a company resident in the UK.) The parent/subsidiary relationship is to be determined in accordance with CTA10/S1154. The treatment of interest payments on this type of security may, however, be affected by the terms of the relevant Double Taxation Agreement (see DT1825).