Section 1020 | Transfers of assets or liabilities treated as distributions

(1)This section applies if on a transfer of assets or liabilities—

(a)by a company to its members, or

(b)to a company by its members,

the amount or value of the benefit received by a member exceeds the amount or value of any new consideration given by the member.

(2)The company is treated for the purposes of the Corporation Tax Acts as making a distribution to the member of an amount equal to the excess....

(2A)But the company is not treated as making a distribution under subsection (2) if the transfer of assets or liabilities—

(a)is a distribution by virtue of paragraph B in section 1000(1), or

(b)would be such a distribution in the absence of sub-paragraph (a) of that paragraph (distribution representing repayment of capital on the shares).

(3)For the purposes of subsection (1) the amount or value of a benefit, or of any consideration, is determined in accordance with the market value.