CheckLists.Tax (beta)
B2. Sale etc. by a company
INCOME TAX
Trading income
- Identifying trading receipts
XX
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Sale to shareholder
- Sale at undervalue giving rise to distribution
General rule
- Sale at undervalue by UK resident company to member is a deemed distribution (CTA 2010, s.1000(1)(G)).
Reversal of inadvertent distribution
- HMRC accept that if there was no intention to make a distribution + the parties made reasonable efforts to avoid one, an inadvertent distribution may be reversed.
- Two methods:
(1) Member agrees to pay the difference.
(2) Transaction reversed entirely.
- Further conditions explained at CTM15295, including the need to have obtained independent valuation.
Legislation: CTA 2010, s.1000(1)(G);
Cases:
HMRC manuals: CTM15295;
Commentary:
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Transfer of assets abroad
- Disposal of asset to non-resident person by closely held company as a relevant transfer
- The TOAA rules apply to a relevant transfer by a closely-held company in which an individual has a qualifying interest (ITA s.720A).
- Only applies to income arising on or after 6 April 2024 (FA 2024, s.22(10)).
- See further i1. Creation and addition to trust.
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CAPITAL GAINS TAX
Non-resident company gains attributed to participators
- XX
XX
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CORPORATION TAX ON CHARGEABLE GAINS
Group relief
- XX
See G11. Intra-group transfer.
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