Beard: dividends of a capital nature

The structure of the UK tax regime regarding the taxation of dividends and distributions contains a number of idiosyncrasies.

A company within the scope of UK corporation tax pays tax on dividends and distributions it receives from UK and non-UK companies (CTA 2009 s 931A). However there are some broad exemptions from this charge to tax as set out in CTA 2009 Part 9A.

For the most part the dividends and distributions that are within the scope of this regime are defined in CTA 2010 Part 23. It extends to a broad range of ‘distributions’ from pure cash dividends to some distributions or transfers of assets even to some interest payments irrespective of whether the distribution would otherwise be regarded as income or capital in the hands of the recipient. In broad terms the same...