105 Small companies’ rate not available to certain close companies.
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Propose a changeUnited Kingdom · statute
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In force since 2026-03-18, as the publisher states.
Copy read on 2026-11-08. The page it was read from
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.
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Propose a change(1) In section 231 of the Taxes Act 1988 (tax credits for certain recipientsof qualifying distributions) in subsection (3) after the words “made and”there shall be inserted the words “subject to subsections (3A) to (3D)below” and after that subsection there shall be inserted— (3A) Subject to subsection (3B) below, where it appears to the inspector that,in any accounting period of a company at the end of which it is a closeinvestment-holding company— (a) arrangements relating to the distribution of the profits of the companyexist or have existed the main purpose of which or one of the main purposesof which is to enable payments, or payments of a greater amount, to be madeto any one or more individuals under subsection (3) above in respect of suchan excess as is mentioned in that subsection, and (b) by virtue of those arrangements, any eligible person— (i) receives a qualifying distribution consisting of a payment made by thecompany on the redemption, repayment or purchase of its own shares, or (ii) receives any other qualifying distribution in respect of shares in orsecurities of the company, where the amount or value of the distribution isgreater than might in all the circumstances have been expected but for thearrangements, the entitlement of the eligible person to have paid to him undersubsection (3) above all or part of a tax credit in respect of anydistribution made by the company in the period shall be restricted to suchextent as appears to the inspector to be just and reasonable. (3B) Subsection (3A) above does not apply in relation to a tax credit inrespect of a dividend paid by a company in any accounting period in respectof its ordinary share capital if— (a) throughout the period, the company’s ordinary share capital consisted ofonly one class of shares, and (b) no person waived his entitlement to any dividend which would have becomepayable by the company in the period or failed to receive any dividend whichhad become due and payable to him by the company in the period. (3C) In subsection (3A) above— “arrangements” means arrangements of any kind whether inwriting or not, “close investment-holding company” has the meaning given bysection 13A, and “eligible person”, in relation to a qualifying distribution,means an individual resident in the United Kingdom who would (apart fromsubsection (3A) above) be entitled to have paid to him under subsection (3)above all or part of a tax credit in respect of the distribution. (3D) In determining under subsection (3) above whether a person is entitled tohave any excess of tax credit paid to him in a case where subsection (3A)above applies, tax credits shall be set against income tax in the order thatresults in the greatest payment in respect of the excess. (2) This section shall have effect in relation to distributions made bycompanies in accounting periods beginning after 31st March 1989.
Propose a changeSchedule 12 to this Act (in which Part I contains administrativeprovisions relating to close companies and Part II makes amendments connectedwith section 103 above) shall have effect.
Propose a change(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Propose a change(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) In section 824(9) of the Taxes Act 1988 (repayment supplements), for the words from “or, in” to “section 701)” there shall be substituted the words “or personal representatives (within the meaning of section 111 of the Finance Act 1989)”. (5) ... this section shall apply for the year 1989-90 and subsequent years of assessment. (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Propose a change(1) In the following enactments, namely— (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) section 25(7) of that Act (information about assets disposed of), for “£3,000”, in each place where it occurs, there shall besubstituted “£6,000”. (2) This section applies to disposals on or after 6th April 1989 andaccordingly, in relation to subsection (1)(b) above, to assets acquired on orafter that date.
Propose a change(1) Section 20 of the Taxes Management Act 1970 (power tocall for documents of taxpayer and others) shall be amended in accordance withsubsections (2) to (8) below. (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) Subsections (4) and (5) shall be omitted. (6) In subsection (6)— (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) the words “and in relation” onwards shall be omitted. (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10) This section shall apply with respect to notices given on or after the day on which this Act is passed.
Propose a change(1) In section 20A of the Taxes Management Act 1970 (powerto call for papers of tax accountant) for the lasr sentence of subsection (1)there shall be substituted— (1A) The reference to documents in subsection (1) above does not include— (a) personal records (as defined in section 12 of the Police and Criminal Evidence Act 1984), or (b) journalistic material (as defined in section 13 of that Act). (1B) Subject to subsection (1A) above, the reference to documents in subsection(1) above is to those specified or described in the notice in question;and— (a) the notice shall require documents to be delivered within such time (whichshall not be less than thirty days after the date of the notice) as may bespecified in the notice; and (b) the inspector may take copies of them or of extracts from them. (2) This section shall apply with respect to notices given on or after the dayon which this Act is passed.
Propose a change(1) Section 20B of the Taxes Management Act 1970(restrictions on powers under sections 20 and 20A) shall be amended as follows. (2) In subsection (1), after the word “question” there shall be inserted the words “, or to furnish the particulars in question”. (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) In subsection (2), after the words “deliver documents”, in the first place where they occur, there shall be inserted the words “or furnish particulars”. (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) In subsection (7), the words from “to a person” to “daughter”shall be omitted. (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8) This section shall apply with respect to notices given on or after the day on which this Act is passed.
Propose a change(1) After section 20B of the Taxes Management Act 1970there shall be inserted— Falsification etc. of documents. 20BB (1) Subject to subsections (2) to (4) below, a person shall be guilty of anoffence if he intentionally falsifies, conceals, destroys or otherwisedisposes of, or causes or permits the falsification, concealment, destructionor disposal of, a document which— (a) he has been required by a notice under section 20 or 20A above, or (b) he has been given an opportunity in accordance with section 20B(1) above, to deliver, or to deliver or make available for inspection. (2) A person does not commit an offence under subsection (1) above if heacts— (a) with the written permission of a General or Special Commissioner, theinspector or an officer of the Board, (b) after the document has been delivered or, in a case within section 20(3)or (8A) above, inspected, or (c) after a copy has been delivered in accordance with section 20B(4) or (14)above and the original has been inspected. (3) A person does not commit an offence under subsection (1)(a) above if heacts after the end of the period of two years beginning with the date on whichthe notice is given, unless before the end of that period the inspector or anofficer of the Board has notified the person in writing that the notice hasnot been complied with to his satisfaction. (4) A person does not commit an offence under subsection (1) (b) above if heacts— (a) after the end of the period of six months beginning with the date on whichan opportunity to deliver the document was given, or (b) after an application for consent to a notice being given in relation tothe document has been refused. (5) A person guilty of an offence under subsection (1) above shall beliable— (a) on summary conviction, to a fine not exceeding the statutory maximum; (b) on conviction on indictment, to imprisonment for a term not exceeding twoyears or to a fine or to both. (2) This section shall apply to any falsification, concealment, destructionor disposal of a document occurring on or after the day on which this Act ispassed.
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