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Section 122: Distribution which is not a new holding within Chapter II.

Taxation of Chargeable Gains Act 1992 · 1992 c. 12View on legislation.gov.uk

Part IV: Shares, securities, options etc. — Chapter I: General

Where a person receives or becomes entitled to receive in respect of shares in a company any capital distribution from the company (other than a new holding as defined in section 126) he shall be treated as if he had in consideration of that capital distribution disposed of an interest in the shares.

Subsection (1) is subject to the provisions of section 140A(1D) and section 140E(7).

If ... the amount distributed is small, as compared with the value of the shares in respect of which it is distributed, ...—

the occasion of the capital distribution shall not be treated for the purposes of this Act as a disposal of the asset, and
the amount distributed shall be deducted from any expenditure allowable under this Act as a deduction in computing a gain or loss on the disposal of the shares by the person receiving or becoming entitled to receive the distribution of capital.

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In this section—

the "amount distributed" means the amount or value of the capital distribution,
"capital distribution" means any distribution from a company, including a distribution in the course of dissolving or winding up the company, in money or money's worth except a distribution which in the hands of the recipient constitutes income for the purposes of income tax.

The reference in subsection (5)(b) to a distribution in the course of dissolving a company includes a reference to a distribution to which section 1030A(3) of CTA 2010 (distributions prior to dissolution of company) applies.

The reference in subsection (5)(b) to a distribution which in the hands of the recipient constitutes income for the purposes of income tax includes, where the recipient is a company, a distribution to which the charge to corporation tax on income under Part 9A of CTA 2009 (company distributions) would apply were the distribution not exempt for the purposes of that Part.

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Reuse reviewed 21 August 2026 under Open Government Licence v3.0.