Taxes Consolidation Act 1997 section 414

Meaning of "the profit distribution"

Section 414 defines "the profit distribution" — the notional distribution used to determine the percentage of profits to which one company is beneficially entitled as an equity holder in another company, for the purposes of the 75% group relief test in section 412.

• The profit distribution is a hypothetical full distribution in money of the other company's profits for the relevant accounting period, whether or not those profits are actually distributed.
• Where the other company has no profits in the accounting period, a nominal figure of €100 is used as the basis for the calculation.
• Repayments of share capital or loan principal are excluded from the profit distribution unless they constitute a distribution in their own right.
• Any payment to which an equity holder is entitled as such — even if it would not ordinarily be treated as a distribution — is included in the profit distribution calculation.