• +1 747 212 0206
  • +44 20 3286 8868
  • +86 21 2052 0623

What kinds of reserves are distributable?

Group Reorganisations

3 April 2014

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.

Summary of Reserves

Free insights

Get practical advice & insights on the Legal Implementation of Transfer Pricing for Multinational Groups

We won't share your details and you can opt-out any time. Learn more in our Privacy Policy

Article by
Paul Sutton
LCN Legal Co-Founder

Free Guide: Effective Intercompany Agreements for TP Compliance