Strange, perhaps unintended?

A NEW SECTION 686A has been provided by FA 2006 Sch 13 para 3 as a substitute for the previous version. It appears that an unintended result may have occurred as a result of the wording. On an extreme view it could produce a charge to income tax at the trust rate with no tax credit in circumstances where the payment would not previously have been taxed as income. All references are to TA 1988 unless otherwise stated.

Can it be?

The new s 686A provides for a payment made by a company 'on the redemption repayment or purchase of its own shares' to be 'treated as if it were income to which s 686 applies': see subsections (1) and (2)(a).

This wording makes no reference to a 'qualifying distribution' as its predecessor did and on a literal reading it brings within...