Distributions will be exempt if they fall within one or more of the five exempt classes as summarised in D5.152, one of which is where the distribution is from a controlled company.
A distribution falls within this exemption if1:
- Ìý
•ÌýÌýÌýÌý the recipient controls the payer, or
- Ìý
•ÌýÌýÌýÌý the recipient is one of two persons (recipient A and B) who, taken together, control the payer, and
- Ìý
–ÌýÌýÌýÌý recipient A passes a 40% control test ('recipient A control test' – see below)
- Ìý
–ÌýÌýÌýÌý recipient B passes a different 40% control test ('recipient B control test' – see below)
Controlled companies distribution exemption—meaning of control
The control test for the controlled company distribution exemption comes from the controlled foreign company (CFC) control tests (see D4.404) with some modifications. In broad terms, a company will be controlled by any person or persons who (directly or indirectly) have 'legal' control or 'economic' control of the company.
Legal control
A person controls a company if they have the
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Web page updated on 17 Mar 2025 16:00