Section 1020 — Corporation Tax Act 2010: Transfers of assets or liabilities treated as distributions

Transfers of assets or liabilities treated as distributions 1020 1 This section applies if on a transfer of assets or liabilities—

a by a company to its members, or b to a company by its members, the amount or value of the benefit received by a member exceeds the amount or value of any new consideration given by the member.

2 The company is treated for the purposes of the Corporation Tax Acts as making a distribution to the member of an amount equal to the excess. ... 2A But the company is not treated as making a distribution under subsection (2) if the transfer of assets or liabilities—

a is a distribution by virtue of paragraph B in section 1000(1), or b would be such a distribution in the absence of sub-paragraph (a) of that paragraph (distribution representing repayment of capital on the shares).

3 For the purposes of subsection (1) the amount or value of a benefit, or of any consideration, is determined in accordance with the market value.