Section 3C | Prevention of double UK taxation ^F1

(1)If—^F1

(a)an amount of tax is paid by a person as a result of section 3 in respect of a gain, and^F1

(b)there is a distribution of an amount in respect of the gain before the end of the relevant period,^F1

the amount of tax is applied so as to reduce or extinguish any liability of the person to tax in respect of the distribution.

(2)For the purposes of subsection (1)—^F1

(a)the distribution is one made by way of dividend or distribution of capital or on the dissolution of the company,^F1

(b)the tax in respect of the distribution is income tax, corporation tax or capital gains tax, and^F1

(c)in determining the liability to tax of any individual in respect of any distribution for a tax year it is to be assumed that the distribution is the highest part of the individual's income for the year.^F1

(3)For the purposes of subsection (1) “the relevant period” means the period of 3 years from the end of whichever of the following periods is earlier—^F1

(a)the period of account of the company in which the gain accrued, and^F1

(b)the period of 12 months beginning with the date on which the gain accrued.^F1

(4)The amount of tax paid by a person as a result of section 3 is allowable as a deduction in calculating a chargeable gain accruing on the disposal by the person of any asset representing the person's interest as a participator in the company.^F1

(5)An amount of tax—^F1

(a)is not to be used more than once under this section (whether to reduce or extinguish a liability or as a deduction or a combination of those things), and^F1

(b)is not to be applied if it is reimbursed by the company.^F1