Section 931H | Distributions derived from transactions not designed to reduce tax

(1)A dividend or other distribution falls into an exempt class if it is made in respect of relevant profits.

(2)In this section “relevant profits” means any profits available for distribution at the time that the distribution is made, other than profits that reflect the results of a transaction, or of one or more of a series of transactions, where—

(a)the transaction or series of transactions achieve a reduction (other than a negligible reduction) in United Kingdom tax, and

(b)the purpose or one of the main purposes of that transaction or series of transactions is to achieve that reduction.

(3)A distribution that falls into an exempt class otherwise than by virtue of this section is for the purposes of this section treated, so far as possible, as made in respect of relevant profits.

(4)Any other distribution is for the purposes of this section treated, so far as possible, as made in respect of profits other than relevant profits.

(5)Where by virtue of subsection (4) part of a distribution is treated as made in respect of relevant profits and part is treated as made in respect of profits other than relevant profits, the two parts are treated for the purposes of this Part and Part 2 of TIOPA 2010 (double taxation relief) as separate distributions.