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HMRC internal manual

International Manual

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HM Revenue & Customs
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Distribution exemption: overview: the legislation

A summary of the legislation

Distributions are charged to corporation tax only if they are not exempt. CTA09/Part 9A is designed to ensure that the great majority of dividends and other distributions will be exempt.

Part 9A is divided into four chapters:

  • Chapter 1 establishes the charge to corporation tax (S931A).
  • Chapter 2 contains the exemption rules for small companies (S931B to S931C).
  • Chapter 3 contains the exemption rules for all other companies (S931D to S931Q).
  • Chapter 4 contains interpretation and other incidental rules, and a right to elect that exemption should not apply (S931R to S931W).

In addition to Part 9A, FA09 introduced certain other consequential changes, including amendment to life and general insurance company and Lloyd’s rules, and the manufactured dividend rules.

The detailed commencement provisions can be found in FA09/SCH14.