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Since the Readers’ Forum query Different words and its responses were published there has been a Ministerial Statement on 24 February 2010 and this year’s Budget Note 05 has announced a retrospective change in the law in the area of distributions.
HMRC say their practice was to treat all UK distributions as being ‘of an income nature’ and hence exempt under TA 1988 s 208/CTA 2009 s 1285 under the old rules unless there was a rule that said the distribution should be treated as a capital distribution in which case TCGA 1992 s 122 would apply.
In fact the Budget Note says that this approach technically became untenable following a ‘clarification’ of the law in
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