Section CD 26 — Income Tax Act 2007: Capital distributions on liquidation or emigration

CD 26 Capital distributions on liquidation or emigration When this section applies (1) This section applies when a shareholder— (a) is paid an amount in relation to a share on the liquidation of the company: (b) is treated under section FL 2 (Treatment of emigrating companies and their shareholders) as being paid an amount in relation to a share in the company. Return of subscribed capital or capital gains (2) The amount paid is a dividend only to the extent to which it is more than— (a) the available subscribed capital per share calculated under the ordering rule; and (b) the available capital distribution amount calculated under section CD 44 . Statutory producer board capital levies (3) If the company is a statutory producer board, the amount is not a dividend to the extent to which it is a return of a levy charged specifically for capital development. Non-deductible capital (4) An amount that is not a dividend as a result of subsection (3) is nevertheless treated as a return of capital for the purposes of the capital limitation. Defined in this Act: amount , available capital distribution amount , available subscribed capital , capital limitation , company , dividend , emigrating company , levy , liquidation , ordering rule , pay , share , shareholder , statutory producer board Compare: 2004 No 35 s CD 18