What kinds of reserves are distributable?

The amount of a company’s distributable reserves is relevant when considering whether a dividend can be paid. It is also a factor in deciding whether an asset can be transferred to a related party at book value as opposed to market value, or whether a debt receivable can be waived.

The following table summarises different types of reserves, and gives an indication as to whether or not they are likely to be distributable in the case of a UK private company limited by shares. As always, specific legal and accounting advice will be required to determine the position.