Section 1027 Cap on amount of distributions affected by section 1026

United Kingdom

(1)

Section 1026(2) does not apply to the distributions in question so far as they, together with any affected distributions made previously but after the issue of the bonus share capital, exceed the cap.

(2)

In subsection (1) “the cap” means the total of the amounts—

(a)

paid up, otherwise than by the receipt of new consideration, on shares representing the bonus share capital, and

(b)

not falling to be treated as F1... distributions.

(3)

In subsection (1) “affected distribution” means however much of a distribution made in respect of shares representing the bonus share capital—

(a)

would, but for section 1026, be treated as a repayment of share capital, but

(b)

cannot be so treated because of that section.

(4)

In subsection (2)(a) the reference to amounts paid up is to amounts paid up at the time of the distributions in question or previously.

Annotations

Textual amendments

F1: Word in s. 1027(2)(b) omitted (with effect in accordance with Sch. 1 para. 73 of the amending Act) by virtue of Finance Act 2016 (c. 24), Sch. 1 para. 36

Notes on Part 23

Modifications

C1: Pt. 23 applied (with modifications) by 2003 c. 1, s. 554AC(3) (as inserted (with effect in accordance with Sch. 1 para. 14 of the amending Act) by Finance Act 2018 (c. 3), Sch. 1 para. 2)