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HMRC internal manual

Company Taxation Manual

Close companies: extended meaning of distribution: introduction

CTA2010/S1064 (formerly ICTA88/S418)

Where a company is a close company, the meaning of distribution is extended to certain benefits provided for participators.

The extended meaning of distributions covers any expense incurred by the company in or in connection with the provision for any participator (or an associate of a participator) of living or other accommodation, of entertainment, of domestic or other services, or of other benefits or facilities of whatever nature, to the extent that the expense is not made good to the company by the participator or the associate (see, however, CTM60600 to CTM60620).

As regards:

  • the amount to be regarded as a distribution where benefits in kind or cheap loans are provided see CTM60550.
  • the notification to be sent to the office dealing with the affairs of participator etc, see CTM60530.
  • companies acting in concert, etc, see CTM60620.
  • the definition of ‘participator’, etc, see CTM60107.
  • (prior to 6 April 1999) the assessment of ACT in respect of distributions which are not payments, see CTM22100.