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HMRC internal manual

International Manual

HM Revenue & Customs
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Distribution exemption: Exemption for all other companies: outline

The conditions for exemption

Chapter 3 of CTA09/Part 9A sets out the conditions for a distribution to be exempt from corporation tax if it is received by a company other than a small company.

There are three conditions for exemption set out in CTA09/S931D.

  • The distribution falls into an exempt class.
  • The distribution must not be an amount, typically of interest, that is deemed by CTA10/S1000E or S1000F to be a distribution (see INTM655070).
  • A deduction is not allowed to any foreign resident in accordance with any foreign tax law in respect of the distribution (see INTM652030).

A distribution falls into an exempt class if

  • it falls within one or more of the classes described in CTA09/S931E to S931I
  • it is not prevented from falling within the exempt classes in CTA09/S931E to S931I by reason of any of the anti-avoidance rules in S931J to S931Q.