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HMRC internal manual

International Manual

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HM Revenue & Customs
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Distribution exemption: overview: background

Introduction

Part 9A of CTA09 was introduced by FA 2009 with effect for distributions made on or after 1 July 2009. It establishes the scope of the corporation tax charge in respect of company distributions. The definition of distribution is taken from Part 23 of CTA10. Part 9A applies to distributions from UK and foreign companies.

Part 9A was originally limited in scope so that it had effect for distributions of an income nature. This limitation was removed by a change made in Finance (No.3) Act 2010. The extension in scope means that Part 9A now has effect for all distributions regardless of whether they are income or capital in nature.

The change has retrospective effect for all distributions made on or after 1 July 2009, the date of the introduction of Part 9A. However, companies are able to elect for the retrospective aspect of the changes not to apply for distributions made before 22 June 2010.