Part 15Transactions in securities
Circumstances in which corporation tax advantages obtained or obtainable
741Abnormal dividends: the excessive return condition
1
The excessive return condition is that the dividend substantially exceeds a normal return on the consideration provided by the recipient for the relevant securities.
2
In this section “the relevant securities” means-
a
the securities in respect of which the dividend was received, and
b
if those securities are derived from securities previously acquired by the recipient, the securities that were previously acquired.
3
In determining whether an amount received by way of dividend exceeds a normal return, regard must be had—
a
to the length of time before its receipt that the recipient first acquired any of the relevant securities, and
b
to any dividends paid and other distributions made in respect of them during that time.
4
If—
a
the consideration provided by the recipient for any of the relevant securities exceeded their market value at the time the recipient acquired them, or
b
no consideration was so provided,
for the purposes of subsection (1) consideration equal to that market value is taken to have been so provided.