S104 Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005), S101 Corporation Tax Act 2009 (CTA 2009)

The situation where you may be able to tax a distribution on first principles is discussed briefly at BIM24555.

Traders who are members of a mutual entity may make payments to that entity. These payments are allowable if they are not capital (BIM35000) and are incurred wholly and exclusively for the purposes of the trade (BIM42100).

Any payments received by a trader from the entity are treated, on first principles, as a receipt of the recipient's trade to the extent that they constitute a return of contributions made.

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