Section 1071 — Corporation Tax Act 2010: Companies not carrying on a business

Companies not carrying on a business 1071 1 This section applies if a company meets conditions A, B and C.

2 Condition A is that the company does not carry on, and has never carried on—

a a trade, or b a business of holding investments.

3 Condition B is that the company does not hold, and has never held, an office.

4 Condition C is that the company is not established for purposes which include—

a carrying on a trade, b carrying on a business of holding investments, or c holding an office.

5 The provisions of the Corporation Tax Acts relating to distributions apply to distributions made by the company only so far as the distributions are made out of—

a profits of the company which are brought into charge to corporation tax, or b income of the company consisting of exempt ABGH distributions. 5A In subsection (5) “ exempt ABGH distribution ” means a distribution which—

a is a distribution for the purposes of the Corporation Tax Acts only because it falls within paragraph A, B, G or H in section 1000(1),

and b is exempt for the purposes of Part 9A of CTA 2009 (company distributions).

6 In subsection (5) “ profits ” means income and chargeable gains.