Corporation Tax Act 2010 section 1076

Transfer of shares in subsidiaries to members

Section 1076 defines the circumstances under which a distribution consisting of a transfer of subsidiary shares to members qualifies as an exempt distribution for tax purposes.

• A distribution is exempt where a company transfers shares in one or more of its 75% subsidiaries to some or all of its members.
• Six conditions (A to F), set out in sections 1081 and 1082, must all be satisfied in relation to the distribution.
• Where the company making the transfer is itself a 75% subsidiary of another company, two further conditions (L and M in section 1085) must also be met.
• This provision supports demerger transactions by ensuring that qualifying share transfers to members are not treated as taxable distributions.