First Nationwide - Character of a distribution from a Cayman company's share premium account as a dividend governed its UK tax treatment

The English Court of Appeal found that the characterization under Cayman law of a distribution out of a Cayman company's share premium account as a dividend governed its characterization for UK taxation purposes.  This issue is becoming less important from a Canadian income tax perspective as draft s. 90(2) will now deem most capital distributions from foreign affiliates to be dividends.

Neal Armstrong.  Summary of Revenue and Customs Commissioners v. First Nationwide, [2012] BTC 99, [2012] EWCA Civ 278 under s. 90(1) and General Concepts - Substance.