Section 1086 — Corporation Tax Act 2010: Chargeable payments connected with exempt distributions

Chargeable payments connected with exempt distributions 1086 1 This section applies if a chargeable payment is made within 5 years after an exempt distribution.

2 The amount or value of the payment is chargeable—

a to income tax, or b to corporation tax under the charge to corporation tax on income.

3 An amount charged to income tax under subsection (2) is treated for income tax purposes as an amount of income.

4 Income tax under subsection (2) is charged on the full amount or value of the payment made in the tax year.

5 The person liable for any income tax charged under subsection (2) is the person receiving or entitled to the payment.

6 References in this section and sections 1087 to 1094 to a payment include—

a the assumption of a liability, and b any other transfer of money's worth.