Part 23Company distributions
Chapter 5Demergers
Chargeable payments
1088Meaning of “chargeable payment”
1
In this Chapter “a chargeable payment” means any payment which—
a
meets each of conditions A to D in this section, or
b
is a chargeable payment by virtue of section 1089.
2
Condition A is that the payment is made by a company concerned in an exempt distribution and is made (directly or indirectly)—
a
to a member of that company, or
b
to a member of any other company concerned in the exempt distribution.
3
Condition B is that the payment is made—
a
in connection with the shares in the company making the payment,
b
in connection with the shares in any other company concerned in the exempt distribution, or
c
in connection with any transaction affecting the shares mentioned in paragraph (a) or (b).
4
Condition C is that the payment—
a
is not made for genuine commercial reasons, or
b
forms part of a tax avoidance scheme.
5
Condition D is that the payment—
a
is not a distribution or an exempt distribution, and
b
is not made to a company that belongs to the same group as the company making the payment.
6
In this section and section 1089—
“tax avoidance scheme” means a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax, and
“tax” includes stamp duty and stamp duty land tax.
7
This section is to be read with section 1089.