Paragraph 3

(1)

Part 9A of CTA 2009 (company distributions) is amended as follows.

(2)

In section 931A (charge to tax), omit subsection (2) and for subsection (3) substitute—

“(3)
A distribution is exempt for the purposes of this Part if it is exempt under—
(a)
Chapter 2 (distributions received by small companies), or
(b)
Chapter 3 (distributions received by companies that are not small).”

(3)

In section 931H (dividends derived from transactions not designed to reduce tax)—

(a)

in the heading, for “Dividends” substitute “ Distributions ”,

(b)

in subsection (1)—

(i)

after “dividend” insert “ or other distribution ”, and

(ii)

for “paid” substitute “ made ”,

(c)

in subsection (2), for “dividend is paid” substitute “ distribution is made ”,

(d)

in subsections (3) and (4)—

(i)

for “dividend” substitute “ distribution ”, and

(ii)

for “paid” substitute “ made ”, and

(e)

in subsection (5)—

(i)

for “dividend” substitute “ distribution ”,

(ii)

for “paid” (in both places) substitute “ made ”, and

(iii)

for “dividends” substitute “ distributions ”.

(4)

After section 931R insert—

“Chargeable gains
Chargeable gains
931RA
The fact that a dividend or other distribution is exempt does not prevent it from being taken into account in the calculation of chargeable gains.”