CTM15560 | Distributions: general: reciprocal arrangements

CTA10/S1112 is an anti-avoidance provision that applies where two or more companies enter into arrangements to make distributions to each other's members. In these circumstances the legislation treats anything done by one of the companies as if it had been done by any of the others.

For example, if companies A and B enter arrangements whereby:

• company A makes payments to company B's members, and

• company B makes payments to company A's members,

then the payments are treated as distributions.