Taxes Consolidation Act 1997 section 614

Capital distribution derived from chargeable gain of company: recovery of tax from shareholder

Section 614 enables Revenue to recover unpaid corporation tax on a chargeable gain from a person connected with the company who received a capital distribution derived from or consisting of that gain.

• Where a company makes a capital distribution (other than a reduction of capital) to a connected person, and the distribution derives from or constitutes a disposal on which a chargeable gain accrued to the company, Revenue may pursue the connected person for unpaid corporation tax on that gain.
• If the corporation tax remains unpaid six months after the due date, the connected person may be assessed in the company's name within two years of that date, subject to a cap equal to the lesser of the distribution received and the person's proportionate share of the tax on the gain.
• A connected person who pays tax under this section may recover the amount paid from the company.
• The section does not affect the connected person's own separate liability to tax on the capital distribution to the extent it represents a disposal of an interest in shares.