Corporation Tax Act 2010
2010 CHAPTER 4
Introduction
Part 23: Company distributions
Chapter 2: Matters which are distributions
Section 1006: Distributions exceeding consideration received for issue of security
2978.This section qualifies the meaning of “the principal secured” for the purposes of section 1005 and of paragraph E in section 1000. It is based on section 209(3) of ICTA.
2979.The basic meaning of “principal secured” is not defined in tax statute and takes its general meaning, subject to any relevant specific tax rules.
2980.In measuring the extent to which there is more than a reasonable commercial return for the use of the principal, the “principal secured” cannot be greater than the amount given for the issue of the security.
2981.Section 1117(6) provides a further qualification if securities are issued at a price less than the amount repayable on them, and are not listed on a recognised stock exchange.
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