Modifications etc. (not altering text)
C1Pt. 15 modified (with effect in accordance with s. 105(1) of the modifying Act) by Finance Act 1996 (c. 8), Sch. 13 para. 6(1) (with Sch. 13 para. 16, Sch. 15)
Textual Amendments
F1Pt. 15 Ch. 1C heading substituted for heading before s. 686 (with effect in accordance with s. 74(2) of the amending Act) by Finance Act 1995 (c. 4), Sch. 17 para. 12
Modifications etc. (not altering text)
C2Pt. 15 Ch. 1C modified (6.4.2005 with effect in accordance with s. 883(1) of the modifying Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 457(1)(3) (with Sch. 2)
Textual Amendments
F2Cross-heading before s. 686 replaced by Pt. 15 Ch. 1C heading (with effect in accordance with s. 74(2) of the amending Act) by Finance Act 1995 (c. 4), Sch. 17 para. 12
(1)This section applies where—
(a)a qualifying distribution is made to trustees;
(b)the trustees are not the trustees of a unit trust scheme; and
(c)the qualifying distribution falls within subsection (2) below.
(2)A qualifying distribution falls within this subsection if it is a payment made by a company—
(a)on the redemption, repayment or purchase of its own shares; or
(b)on the purchase of rights to acquire its own shares.
(3)The relevant part of the distribution shall be treated for the purposes of the Tax Acts as if it were income to which section 686 applies.
(4)In subsection (3) above the reference to the relevant part of the distribution is a reference to so much (if any) of the distribution as—
(a)is not income falling within paragraph (a) of section 686(2);
(b)does not fall to be treated for the purposes of the Income Tax Acts as income of a settlor;
(c)is not income arising under a trust established for charitable purposes; and
(d)is not income from investments, deposits or other property held for any such purposes as are mentioned in sub-paragraph (i) or (ii) of section 686(2)(c).
(5)Subsection (6) of section 686 shall apply for the purposes of this section as it applies for the purposes of that section.]
Textual Amendments
F3S. 686A inserted (with effect in accordance with s. 32(11) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), s. 32(9)