Distributions received by UK companies are taxable unless they fall within one of the exemptions. This document covers the basic principles on dividends, together with the small company definition and exemption; dividends received by non-small companies; exempt classes; capital distributions; tax advantage scheme; and election to treat dividend as non-exempt.

Points discussed within this guidance note:

> Introduction

Tax on distributions is payable by UK companies unless they fall within a particular exempt category, regardless of whether they are paid by UK or overseas companies. This guidance note deals with the tax treatment of distributions made to companies on or after 1 July 2009.

> Scope

The definition of 'distributions' for the purpose of the corporation tax acts is broad. This note sets out the circumstances which may qualify as a distribution.

> Basic principles

> Small company definition

> Small company exemption

> Non-small companies

> Exempt classes

> Capital distributions

> Tax advantage scheme

> Election to treat a dividend as non-exempt


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