PART V MISCELLANEOUS RELIEFS
CHAPTER IV TRANSFERS WITHIN THREE YEARS BEFORE DEATH
135 Reorganisation of share capital, etc.
1
This section has effect where the transferred property consists of shares in relation to which there occurs before the relevant date a transaction to which F1127 of the 1992 Act applies or would apply but for section F2134 of that Act, that is to say—
a
a reorganisation within the meaning of section F2126(1) of that Act,
b
the conversion of securities within the meaning of section F2132 of that Act,
c
the issue by a company of shares in exchange for shares in another company in such circumstances that section F2135 of that Act applies, or
d
the issue by a company of shares under such an arrangement as is referred to in section F2136of that Act,
2
In the following provisions of this section “the original shares” and “the new holding” shall be construed in accordance with section F2126(1).
3
Where this section has effect the original shares and the new holding shall be treated as the same property for the purposes of this Chapter.
4
Where this section has effect and, as part of or in connection with the transaction concerned, the transferee or his spouse F3or civil partner becomes liable to give any consideration for the new holding or any part of it, then for the purposes of section 131 above the market value of the transferred property on the relevant date shall (except where apart from this section it reflects the liability) be taken to be reduced by an amount equal to that consideration.
5
For the purposes of subsection (4) above, there shall not be treated as consideration given for the new holding or any part of it—
a
any surrender, cancellation or other alteration of any of the original shares or of the rights attached thereto, or
b
any consideration consisting of any application, in paying up the new holding or any part of it, of assets of the company concerned or of any dividend or other distribution declared out of those assets but not made.