Section 1032 | Interest etc paid in respect of certain securities

(1)Any interest or other distribution which—

(a)is paid out of the assets of a company (“the borrower”) to another company which is within the charge to corporation tax,

(b)is paid in respect of securities of the borrower which are special securities (as defined in section 1015), and

(c)does not fall within paragraph E in section 1000(1) (distributions in respect of non-commercial securities),

is not a distribution for the purposes of the Corporation Tax Acts.

(2)But subsection (1) does not apply if the company to which the interest or other distribution is paid is entitled under any enactment to an exemption from tax in respect of that interest or distribution.