BIM24615 - Meaning of trade: mutual trading and members clubs: distributions on winding-up: statute: what is taxed?

S104 Income Tax (Trading and Other Income) Act 2005, S101 Corporation Tax Act 2009

The charge under these provisions applies where:

  1. a body corporate which has at any time carried on a trade consisting of or including mutual business (whether or not confined to its members) is being or has been wound up or dissolved;
  1. a person receives money or money바카라 사이트™s worth representing assets of the body corporate; and
  1. the assets represent profits of the body corporate바카라 사이트™s mutual business.

For the purposes of (2) above, money or money바카라 사이트™s worth represents assets of the body corporate if:

(a) it forms part of the body corporate바카라 사이트™s assets;

(b) it forms part of the consideration for the transfer of assets of the body corporate as part of a scheme of amalgamation or reconstruction which involves its winding-up; or

(c) it consists of the consideration for a transfer or surrender of a right to receive anything within (a) or (b) and does not otherwise give rise to a charge to Income Tax or Corporation Tax on the recipient.

If the recipient of such money or money바카라 사이트™s worth has previously made any payment to the body corporate for which the recipient was allowed a deduction in calculating the profits of its trade then the amount or value of the money or money바카라 사이트™s worth is treated as a receipt in calculating the profits of the trade. If the recipient is no longer carrying on the trade, the amount or value is treated as a post cessation receipt (see BIM90000).

Where the transfer or surrender at (c) above is not at arm바카라 사이트™s length, you should substitute the value of the right to receive the distribution for the consideration actually paid.