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HMRC internal manual

Company Taxation Manual

Close companies: extended meaning of distribution: notifying office dealing with participators affairs

The consequences of a distribution under CTA2010/S1064 (formerly ICTA88/S418) for the company are that no deduction in computing profits will be due (see CTM60520) and that, for distributions prior to 6 April 1999, ACT may have to be accounted for. There may be a further consequence for the recipient of the distribution, who may be liable to IT at higher rates. Accordingly where a company has made, and has, where appropriate, accounted for the ACT on, a distribution under Section 1064 (1), a notification should be sent to the office dealing with the affairs of the participator, or associate of a participator, concerned, showing:

  • the name, and if known, the address and the reference of the recipient of the distribution,
  • the name of the company making the distribution,
  • the nature of the benefit etc,
  • the amounts of the distribution and, where appropriate, the ACT.