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Legislation
Corporation Tax Act 2010

Crossheading Company's entitlement to profits or assets available for distribution: basic provisions

  • Section 165 Proportion of profits available for distribution to which company is entitled
  • Section 166 Proportion of assets available for distribution to which company is entitled
  • Section 167 Profits or assets available for distribution and entitlement: supplementary
  • Section 168 Meaning of “the relevant accounting period”
  1. Company's entitlement to profits or assets available for distribution: basic provisions
  2. Proportion of profits available for distribution to which company is entitled

Section 165 | Proportion of profits available for distribution to which company is entitled

From legislation.gov.uk

(1)This section applies for the purpose of determining the proportion to which a company (“company A”) is, at any time, beneficially entitled of any profits available for distribution to the equity holders of another company (“company B”).

(2)The proportion is the proportion to which company A would, at that time, be beneficially entitled on a distribution in money to the equity holders of company B (“the profit distribution”) of—

(a)an amount of profits equal to company B's total profits of the relevant accounting period (see section 168), or

(b)if there are no such total profits, profits of £100.

(3)It does not matter for the purposes of subsection (2) if any of company B's total profits are not actually distributed.

(4)If company B is non-UK resident, company B's total profits are to be calculated as if it were UK resident.

(5)For the purposes of the profit distribution, it is to be assumed that no payment is made by way of repayment of share capital or of the principal secured by any loan unless that payment is a distribution.

(6)Subject to subsection (5), if an equity holder is entitled as such to a payment which (apart from this subsection) would not be a distribution, the equity holder is nevertheless to be treated as entitled to the payment on the profit distribution.

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