Annex 1: Minor changes in the law Change 57: Company distributions: premium paid on redemption of share capital: section 1024
This change narrows the scope of the stipulation in section 211(7) of ICTA that premiums paid on redemption of share capital are not treated as repayments of share capital.
Section 211(7) of ICTA is not limited in its application and therefore potentially applies across the entirety of ICTA. It appears however to have no practical application beyond Chapter 2 of Part 6 of ICTA, which sets out what is to be treated as a distribution.
This change therefore makes it explicit that this particular stipulation applies only to the question of what is to be treated as a distribution.
This change is in principle adverse to some taxpayers and favourable to others. But it is expected to have no practical effect as it is in line with generally accepted practice.