CTM40975 - Particular Trades: mutual concerns: distributions

CTA10/S1070

A company which carries on mutual business, that is

• mutual trading,
• mutual insurance, or
• other mutual business

will be treated as making a distribution within CTA10/PART23 only so far as it is a relevant distribution made out of profits brought into the charge to corporation tax, or out of franked investment income.

A relevant distribution means a distribution made to a person who participates in the mutual activities of the business and which derives from those activities. See BIM24555 onwards.

ACT is not payable by a company on distributions made on or after 6 April 1999.

CTIS (Technical) will advise if necessary.