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As summarised at D5.150, distributions paid by a UK or overseas company are chargeable to corporation tax on the recipient unless the distribution is exempt. Two different regimes apply depending upon whether the recipient is a small company (see D5.151) or not small¹. Provided a taxpayer does not elect otherwise (see D5.150), distributions received by companies that are not small in the accounting period of receipt will be exempt if²:

1. Ìý

   •ÌýÌýÌýÌý the distribution falls into an exempt class (see table summary below) and is not within the specific anti-avoidance provisions

2. Ìý

   •ÌýÌýÌýÌý the distribution is not on a non-commercial security (D5.120) or a distribution on a special security (D5.127). These two types of distributions involve interest being recharacterised as a distribution, which will generally be taxable income

3. Ìý

   •ÌýÌýÌýÌý no deduction is allowed to a resident of any territory outside the UK in respect of the distribution

The last two conditions are identical to the corresponding conditions that apply to small companies and so for further details see D5.151.