Section 553 — Income Tax (Earnings and Pensions) Act 2003: Meaning of “appropriate percentage” for purposes of section 552

Meaning of “appropriate percentage” for purposes of section 552 553 1 For the purposes of section 552 “the appropriate percentage” is— P × 100 D where P and D have the meaning given by the following provisions.

2 Unless subsection (3) applies, P is the aggregate of the relevant payment and any other payments received by B or associates of B’s from the trustees of the trust during the period of 12 months ending with the payment date.

3 If—

a any distributions were made to the trustees of the trust by the company in respect of its ordinary share capital during the period of 3 years ending with the payment date, and b the aggregate of those distributions is less than the aggregate mentioned in subsection (2), P is the aggregate of those distributions.

4 Unless subsection (5) applies, D is the amount determined as follows— Step 1 Calculate the aggregate of—

a any distributions made by the company in respect of its ordinary share capital during the period of 12 months ending with the payment date, b any distributions so made during the period of 12 months immediately preceding that mentioned in paragraph (a),

and c any distributions so made during the period of 12 months immediately preceding that mentioned in paragraph (b). Step 2 Divide the aggregate so calculated by the number of the periods mentioned in paragraphs (a) to (c) in which distributions were so made.

5 If no distributions were so made during any of those periods, D is 1.

6 In this section “ the payment date ” and “ the relevant payment ” have the meaning indicated in section 552(1).