743-400 Distributions out of company assets in respect of shares
Any distribution other than a dividend, out of the assets of the company, in cash or otherwise, to its shareholders (in respect of shares in the company, see ¶743-300) is treated as a distribution (paragraph B at CTA 2010, s. 1000(1); see ¶743-350 for dividends). However, any part of it which represents a ‘repayment of capital on the shares’, or is equal in amount or value to ‘new consideration’ received by the company for the distribution, will not form part of that distribution for tax purposes.
Meaning of ‘out of the assets of the company’
A distribution shall be treated as made out of the assets of the company if the cost falls on the company (CTA 2010, s. 1117(3)).