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- Point in Time (01/12/2001)
- Original (As enacted)
Version Superseded: 06/04/2003
Point in time view as at 01/12/2001. This version of this chapter contains provisions that are not valid for this point in time.
Income and Corporation Taxes Act 1988, CHAPTER VI is up to date with all changes known to be in force on or before 06 September 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
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F1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F1S. 247 repealed (with application in accordance with s. 85(6), Sch. 33 Pt. 2(10) Note of the repealing Act) by Finance Act 2001 (c. 9), s. 85(5), Sch. 33 Pt. 2(10)
F2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F2S. 248 repealed (with application in accordance with s. 85(6), Sch. 33 Pt. 2(10) Note of the repealing Act) by Finance Act 2001 (c. 9), s. 85(5), Sch. 33 Pt. 2(10)
(1)M1Subject to subsections (7) to (9) below, this section applies to any of the following share capital, that is to say—
(a)any share capital issued by a company resident in the United Kingdom in consequence of the exercise by any person of an option conferred on him to receive in respect of shares in the company (whether the last-mentioned shares were issued before or after the coming into force of this section) either a dividend in cash or additional share capital; and
(b)any bonus share capital issued by a company so resident in respect of any shares in the company of a relevant class (whether the last-mentioned shares were issued before or after the coming into force of this section).
(2)For the purposes of subsection (1)(b) above a class of shares is a relevant class if—
(a)shares of that class carry the right to receive bonus share capital in the company of the same or a different class; and
(b)that right is conferred by the terms on which shares of that class were originally issued or by those terms as subsequently extended or otherwise varied.
(3)Where a company issues any share capital in a case in which two or more persons are entitled thereto, the following provisions of this sectionand paragraph 12(1)to (3)of Schedule 19 F3 shall have effect as if the company had issued to each of those persons separately a part of that share capital proportionate to his interest therein on the due date of issue.
(4)Subject to the following provisions of this section, where a company issues any share capital in a case in which an individual is beneficially entitled to that share capital, that individual shall be treated as having received on the due date of issue income of an amount which, if reduced by an amount equal to income tax on that income at the [F4Schedule F ordinary rate] for the year of assessment in which that date fell, would be equal to the appropriate amount in cash, and—
(a)[F5the individual shall be treated as having paid income tax at the [F6Schedule F ordinary rate] on that income] or, if his total income is reduced by any deductions, on so much of it as is part of his total income as so reduced;
(b)no repayment shall be made of income tax treated by virtue of paragraph (a) above as having been paid; and
(c)that income shall be treated [F7[F8(without prejudice to paragraph (a) above) as if it were income to which section 1A applies [F9as it applies to income chargeable under Schedule F], but]shall be treated] for the purposes of sections 348 and 349(1) as not brought into charge to income tax.
(5)Where a company issues any share capital to the personal representatives of a deceased person as such during the administration period, the amount of income which, if the case had been one in which an individual was beneficially entitled to that share capital, that individual would have been treated under subsection (4) above as having received shall be deemed for the purposes of Part XVI to be part of the aggregate income of the estate of the deceased.
This subsection shall be construed as if it were contained in Part XVI.
(6)Where a company issues any share capital to trustees in respect of any shares in the company held by them (or by them and one or more other persons) in a case in which a dividend in cash paid to the trustees in respect of those shares would have been to any extent income to which section 686 applies, then—
(a)there shall be ascertained the amount of income which, if the case had been one in which an individual was beneficially entitled to that share capital, that individual would have been treated under subsection (4) above as having received; and
(b)income of that amount shall be treated as having arisen to the trustees on the due date of issue and as if it had been chargeable to income tax at the [F10Schedule F ordinary rate]; and
(c)paragraphs (a) to (c) of subsection (4) above shall, with the substitution of “ income ” for “total income” and with all other necessary modifications, apply to that income as they apply to income which an individual is treated as having received under that subsection.
(7)M2This section does not apply to—
(a)any share capital of which the due date of issue is earlier than 6th April 1975; or
(b)any share capital issued by a company in respect of shares in the company which confer on the holder a right to convert or exchange them into or for shares in the company of a class which is not a relevant class for the purposes of subsection (1)(b) above where the due date of issue of the share capital so issued precedes the earlier of the following dates, namely—
(i)the day next after the earliest date after 5th August 1975 on which conversion or exchange of the shares could be effected by an exercise of that right; and
(ii)6th April 1976 or, in the case of share capital issued by an investment trust, 6th April 1977.
(8)Where, in a case within subsection (4) above, the share capital in question is issued in respect of shares in the company issued before 6th April 1975 which confer on the holder a right to convert or exchange them into or for shares of a different class, this section shall not apply to so much (if any) of any bonus share capital issued by the company after 5th April 1976 in connection with an exercise of that right as would have been issued if that right had been exercised so as to effect the conversion or exchange of the shares on the earliest possible date after 5th April 1975; and subsections (5) and (6) above shall, where applicable, have effect accordingly.
(9)Where any bonus share capital falling within subsection (1)(b) above is after 5th April 1975 converted into or exchanged for shares in the company in question of a different class, then—
(a)this section shall not apply to any shares in the company issued, in connection with the conversion or exchange, in consideration of the cancellation, extinguishment or acquisition by the company of that bonus share capital; but
(b)section 230(a) and (b) shall apply to any shares in the company issued, in connection with the conversion or exchange, in consideration of the cancellation, extinguishment or acquisition by the company of so much of that bonus share capital as caused an individual to be treated under subsection (4) above as having received an amount of income on the due date of issue (or would have done so if the case had been one in which an individual was beneficially entitled to that share capital).
Textual Amendments
F3 Words repealed by 1989 s.187and Sch.17 Part Vin relation to accounting periods beginning after 31March 1989.
F4Words in s. 249(4) substituted (with effect in accordance with Sch. 4 para. 10(4) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 10(2)(a)
F5Words in s. 249(4)(a) substituted (with effect in accordance with s. 121(8) of the amending Act) by Finance Act 1996 (c. 8), s. 122(5)(b)
F6Words in s. 249(4)(a) substituted (with effect in accordance with Sch. 4 para. 10(4) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 10(2)(b)
F7Words in s. 249(4)(c) inserted (16.7.1992 with application for the year 1992-93 and subsequent years of assessment) by Finance (No. 2) Act 1992 (c. 48), s. 19(4)(7)
F8Words in s. 249(4)(c) substituted (with effect in accordance with Sch. 6 para. 28 of the amending Act) by Finance Act 1996 (c. 8), Sch. 6 para. 6
F9Words in s. 249(4)(c) inserted (with effect in accordance with Sch. 4 para. 10(4) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 10(2)(b)
F10Words in s. 249(6)(b) substituted (with effect in accordance with Sch. 4 para. 10(4) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 10(4)
Modifications etc. (not altering text)
C1 See Sch.10 para.5—profit sharing schemes.
Marginal Citations
M1Source—1975 (No.2) s.34(1)-(6)
M2Source—1975 (No.2) s.34(9)-(11)
(1)M3A company shall for each of its accounting periods make, in accordance with this section, returns to the inspector of all share capital to which section 249 applies (“relevant share capital”) and which was issued by it in that period.
(2)M4A return shall be made for—
(a)each complete quarter falling within the accounting period, that is to say, each of the periods of three months ending with 31st March, 30th June, 30th September or 31st December which falls within that period;
(b)each part of the accounting period which is not a complete quarter and ends on the first (or only), or begins immediately after the last (or only), of those dates which falls within the accounting period;
(c)if none of those dates falls within the accounting period, the whole accounting period.
(3)A return for any period for which a return is required to be made under this section (a “return period”) shall be made within 30 days from the end of that period.
(4)M5No return need be made under this section by a company for any period in which it has issued no relevant share capital.
(5)The return made by a company for any return period shall state—
(a)the date on which any relevant share capital issued by it in the period was issued and, if different, the date on which the company was first required to issue it;
(b)particulars of the terms on which any such share capital so issued by it was issued; and
(c)what is, in relation to any such share capital so issued, the appropriate amount in cash.
(6)If it appears to the inspector that a company ought to have, but has not, made a return for any return period, he may (notwithstanding subsection (4) above) by notice require the company to make a return for that period within such time (not being less than 30 days) as may be specified in the notice; and a return required to be made under this subsection shall, if such be the case, state that no relevant share capital was issued in the period in question.
(7)As regards any share capital included in a return made under this section by a company, the inspector may by notice require the company to furnish him within such time (not being less than 30 days) as may be specified in the notice with such further information relating thereto as he may reasonably require for the purposes of sections 230 and 249, this section and section 251and paragraph 12of Schedule 19 F11.
Textual Amendments
F11Words in s. 250(7) repealed by Finance Act 1989 (c. 26), s. 187, Sch. 17 Part V (in relation to accounting periods beginning after 31 March 1989).
Marginal Citations
M3Source—1975 (No.2) Sch.8 7(1)
M4Source—1975 (No.2) Sch.8 7(2)
M5Source—1975 (No.2) Sch.8 7(3)-(6)
M6(1)For the purposes of sections 249 and 250 —
(a)“ ”, in relation to a company, means share capital issued by the company otherwise than wholly for new consideration or such part of any share capital so issued as is not properly referable to new consideration;
(b)“due date of issue”, in relation to any share capital issued by a company, means the earliest date on which the company was required to issue that share capital;
(c)an option to receive either a dividend in cash or additional share capital is conferred on a person not only where he is required to choose one or the other, but also where he is offered the one subject to a right, however expressed, to choose the other instead, and a person’s abandonment of, or failure to exercise, such a right is to be treated as an exercise of the option;
and in section 254 the definition of “security” (in subsection (1)) and subsections (5) and (11) shall not apply.
(2)M7In sections 249 and 250 “the appropriate amount in cash”, in relation to any share capital to which section 249 applies—
(a)in a case where that share capital was issued —
(i)in consequence of the exercise of an option such as is mentioned in section 249(1)(a); or
(ii)in a quantity which is determined by or determines the amount of a dividend in cash payable in respect of share capital in the company of a different class,
and where the relevant cash dividend is not substantially greater nor substantially less than the market value of that share capital on the relevant date, means the amount of the relevant cash dividend or, in a case in which section 249(3) applies, a due proportion of that amount;
(b)in a case where paragraph (a) above does not apply, means the market value of that share capital on the relevant date or, in a case in which section 249(3) applies, a due proportion of that market value.
(3)M8In subsection (2) above—
“the relevant cash dividend”, in a case falling within subsection (2)(a)(i) above, means the cash dividend mentioned in section 249(1)(a) or, in a case falling within subsection (2)(a)(ii) above, means the cash dividend there mentioned (subject to subsection (4) below);
“the relevant date”, in the case of share capital listed in the Stock Exchange Daily Official List, means the date of first dealing and, in the case of share capital not so listed, means the due date of issue; and
“market value”, in relation to any share capital in a company, means, subject to the provisions applied by subsections (5) and (6) below, the price which that share capital might reasonably be expected to fetch on a sale in the open market.
(4)M9Where, in a case falling within subsection (2)(a)(ii) above, the company on the occasion on which it issues the share capital in question also issues a dividend in cash (“the accompanying cash dividend”) in respect of the shares in the company in respect of which that share capital is issued, “the relevant cash dividend” means the cash dividend mentioned in subsection (2)(a)(ii) above reduced by the amount of the accompanying cash dividend.
(5)M10Section [F12272(3) of the 1992 Act] (market value of shares or securities [F13quoted] in the Stock Exchange Daily Official List) shall apply for the purposes of subsection (3) above as it applies for the purposes of that Act.
(6)In the case of shares or securities which are not quoted on a recognised stock exchange at the time when their market value for the purposes of subsection (2) above falls to be determined, subsection (3) of section [F12273 of the 1992 Act] shall apply with respect to the determination of their market value for those purposes as it applies with respect to a determination falling within subsection (1) of that section.
Textual Amendments
F12Words in s. 251(5)(6) substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) of the amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch. 10 para. 14(16) (with ss. 60, 101(1), 171, 201(3)).
F13Word in s. 251(5) substituted (with effect in accordance with Sch. 38 para. 8(2) of the amending Act) by Finance Act 1996 (c. 8), Sch. 38 para. 8(1)
Modifications etc. (not altering text)
C2S. 251(1)(c) applied (19.3.1997) by Finance Act 1997 (c. 16), Sch. 7 para. 4(2)
Marginal Citations
M6Source—1975 (No.2) s.34(8)(a)-(d)
M7Source—1975 (No.2) Sch.8 1(1)-(3)
M8Source—1975 (No.2) Sch.8 1(4), 2(1)
M9Source—1970 (No.2) Sch.8 1(5)
M10Source—1975 (No.2) Sch.8 2(2), (3); 1979(C) Sch.7
Valid from 06/04/2003
Textual Amendments
F14Ss. 251A-251D and preceding cross-heading inserted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 34 (with Sch. 7)
(1)Sections 251B and 251C apply for income tax purposes in connection with shares awarded under an approved share incentive plan.
(2)But those sections do not apply to an individual if, at the time of the award of shares in question—
(a)the earnings from the eligible employment are not (or would not be if there were any) general earnings to which any of the charging provisions of Chapter 4 or 5 of Part 2 of ITEPA 2003 apply, or
(b)in the case of an award made before 6th April 2003, he was not chargeable to tax under Schedule E in respect of the employment by reference to which he met the requirement of paragraph 14 of Schedule 8 to the Finance Act 2000 (employee share ownership plans: the employment requirement) in relation to the plan.
(3)For the purposes of subsection (2)—
(a)“the eligible employment” means the employment which results in the individual meeting the employment requirement in relation to the plan, and
(b)the reference to any of the charging provisions of Chapter 4 or 5 of Part 2 of ITEPA 2003 has the same meaning as it has in the employment income Parts of that Act (see sections 14(3) and 20(3) of that Act).
Modifications etc. (not altering text)
C3Ss. 251A-251D applied (6.4.2003 with effect in accordance with s. 723(1) of the affecting Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 2 para. 87 (with Sch. 7)
(1)Where a cash dividend is paid over to a participant under paragraph 68(4) of Schedule 2 to ITEPA 2003 (cash dividend paid over if not reinvested), the participant is chargeable to tax on the appropriate amount under Schedule F for the year of assessment in which the dividend is paid over.
(2)In subsection (1), the “appropriate amount” means the amount of the dividend paid over (except to the extent that it represents a foreign cash dividend).
(3)For the purposes of determining the tax credit (if any) to which the participant is entitled under section 231, the reference in subsection (1) of that section to the tax credit fraction in force when the distribution is made shall be read as a reference to the fraction in force when the dividend is paid over to the participant.
Modifications etc. (not altering text)
C4Ss. 251A-251D applied (6.4.2003 with effect in accordance with s. 723(1) of the affecting Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 2 para. 87 (with Sch. 7)
(1)If dividend shares cease to be subject to the plan before the end of the period of three years beginning with the date on which the shares were acquired on the participant’s behalf, the participant is chargeable to tax on the appropriate amount under Schedule F for the year of assessment in which the shares cease to be subject to the plan.
(2)In subsection (1) “the appropriate amount” means the amount of the cash dividend applied to acquire the shares on the participant’s behalf (except to the extent that it represents a foreign cash dividend).
(3)For the purposes of determining the tax credit (if any) to which the participant is entitled under section 231, the reference in subsection (1) of that section to the tax credit fraction in force when the distribution is made shall be read as a reference to the fraction in force when the shares cease to be subject to the plan.
(4)Where the participant is charged to tax under this section the tax due shall be reduced by the amount or aggregate amount of any tax paid on any capital receipts under section 501 of ITEPA 2003 in respect of those shares.
(5)In subsection (4) “the tax due” means the amount of tax due after deduction of the tax credit determined under subsection (3).
(6)This section has effect subject to section 498 of ITEPA 2003 (no charge on shares ceasing to be subject to plan in certain circumstances).
Modifications etc. (not altering text)
C5Ss. 251A-251D applied (6.4.2003 with effect in accordance with s. 723(1) of the affecting Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 2 para. 87 (with Sch. 7)
(1)Sections 251A to 251C and this section form part of the SIP code (see section 488 of ITEPA 2003 (approved share incentive plans)).
(2)Accordingly, expressions used in those sections and contained in the index at the end of Schedule 2 to that Act (approved share incentive plans) have the meaning indicated by that index.
(3)In sections 251B and 251C “foreign cash dividend” means a cash dividend paid in respect of plan shares in a company not resident in the United Kingdom.]
Modifications etc. (not altering text)
C6Ss. 251A-251D applied (6.4.2003 with effect in accordance with s. 723(1) of the affecting Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 2 para. 87 (with Sch. 7)
(1)If an inspector discovers that—
(a)F15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b)any set-off or payment of tax credit,
ought not to have been made, or is or has become excessive, the inspector may make any such assessments as may in his judgment be required for recovering any tax that ought to have been paid or any payment of tax credit that ought not to have been made and generally for securing that the resulting liabilities to tax (including interest on unpaid tax) of the persons concerned are what they would have been if only such set-offs or payments had been made as ought to have been made.
(2)In any case where—
(a)interest has been paid under section 826 on a payment of tax credit; and
(b)interest ought not to have been paid on that payment, either at all or to any extent,
an assessment under this section may be made for recovering any interest that ought not to have been paid.
(3)Where—
(a)an assessment is made under this section to recover tax credit paid to a company in respect of franked investment income received by the company in an accounting period; and
(b)more than one payment of tax credit has been made in respect of that period,
any sum recovered shall as far as possible be treated as relating to a payment of tax credit made later rather than to a payment made earlier.
(4)Subsections (2) and (3) above shall have effect in relation to payments of tax credit claimed in respect of accounting periods ending after such day as may be appointed for the purpose of those subsections by order made by the Treasury, not being earlier than 31st March 1992.
(5)The Management Act shall apply to any assessment under this section for recovering a payment of tax credit or interest on such a payment as if it were an assessment to income tax for the year of assessment, or in the case of a company, corporation tax for the accounting period, in respect of which the payment was claimed, and as if that payment represented a loss of tax to the Crown; and any sum charged by any such assessment shall, subject to any appeal against the assessment, be due within 14 days after the issue of the notice of assessment.
Subordinate Legislation Made
P1S. 252(4) power exercised: 30.9.1993 appointed for the purposes of s. 252(2)(3) by S.I. 1992/3066, art. 2(2)(b).
Textual Amendments
F15S. 252(1)(a) repealed (with effect in accordance with Sch. 3 para. 21(3) of the repealing Act) by Finance Act 1998 (c. 36), Sch. 3 para. 21(2), Sch. 27 Pt. 3(2), Note
Modifications etc. (not altering text)
C7S. 252 modified (27.7.1993) by 1993 c. 34, s. 80(8)
C8S. 252 modified (16.8.1995) by The Venture Capital Trust Regulations 1995 (S.I. 1995/1979), reg. 15(4)(5)
C9S. 252 applied (16.8.1995) by The Venture Capital Trust Regulations 1995 (S.I. 1995/1979), reg. 20
C10S. 252 modified (31.7.1997) by Finance (No. 2) Act 1997 (c. 58), s. 35(10)
C11 See 1989 s.157(1)for reckonable date for interest charge under 1970(M) s.86where assessment made to recover corporation tax payable as the result of a claim under s.240made on or after 14March 1989. (Ceases to have effect for accounting periods ending after the day appointed for the purposes of s.86).
Marginal Citations
M11Source—1972 s.102; (No.2) s.88(5)-(7)
M12(1)The Board may by regulations—
(a)modify, supplement or replace any of the provisions of subsections (5) to (9) of section 234 for the purpose of requiring companies resident in the United Kingdom to make returns and give information to the inspector in respect of distributions made by them, whether before or after the passing of this Act, which are not qualifying distributions;
(b)F16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
and references in this Act and in any other enactment to section 234(5) to (9) F17. . . shall be construed as including references to any such regulations.
(2)F18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3)Regulations under this section may—
(a)make different provision for different descriptions of companies and for different circumstances and may authorise the Board, where in their opinion there are special circumstances justifying it, to make special arrangements as respects F19. . . the repayment of income tax borne by a company or the payment to a company of amounts in respect of any tax credit to which it is entitled;
(b)include such transitional and other supplemental provisions as appear to the Board to be expedient or necessary.
(4)The Board shall not make any regulations under this section unless a draft of them has been laid before and approved by a resolution of the House of Commons.
Textual Amendments
F16S. 253(1)(b) repealed (with effect in accordance with Sch. 3 para. 22(5) of the repealing Act) by Finance Act 1998 (c. 36), Sch. 3 para. 22(2)(a), Sch. 27 Pt. 3(2), Note
F17Words in s. 253(1) repealed (with effect in accordance with Sch. 3 para. 22(5) of the repealing Act) by Finance Act 1998 (c. 36), Sch. 3 para. 22(2)(b), Sch. 27 Pt. 3(2), Note
F18S. 253(2) repealed (with effect in accordance with Sch. 3 para. 22(5) of the repealing Act) by Finance Act 1998 (c. 36), Sch. 3 para. 22(3), Sch. 27 Pt. 3(2), Note
F19Words in s. 253(3)(a) repealed (with effect in accordance with Sch. 3 para. 22(5) of the repealing Act) by Finance Act 1998 (c. 36), Sch. 3 para. 22(4), Sch. 27 Pt. 3(2), Note
Marginal Citations
M12Source—1972 s.108
(1)M13In this Part, except where the context otherwise requires—
“new consideration” means, subject to subsections (5) and (6) below, consideration not provided directly or indirectly out of the assets of the company, and in particular does not include amounts retained by the company by way of capitalising a distribution;
“security” includes securities not creating or evidencing a charge on assets, and interest paid by a company on money advanced without the issue of a security for the advance, or other consideration given by a company for the use of money so advanced, shall be treated as if paid or given in respect of a security issued for the advance by the company;
“
” includes stock, and any other interest of a member in a company;and in this section “a 90 per cent. group” means a company and all of its 90 per cent. subsidiaries.
(2)M14In this Part, the expressions “ ” and “in respect of securities of the company”, in relation to a company which is a member of a 90 per cent. group, mean respectively in respect of shares in that company or any other company in the group and in respect of securities of that company or any other company in the group.
(3)Without prejudice to section 209(2)(b) as extended by subsection (2) above, in relation to a company which is a member of a 90 per cent. group, “distribution” includes anything distributed out of assets of the company (whether in cash or otherwise) in respect of shares in or securities of another company in the group.
(4)Nothing in subsections (2) and (3) above shall require a company to be treated as making a distribution to any other company which is in the same group and is resident in the United Kingdom.
(5)M15Where share capital has been issued at a premium representing new consideration, any part of that premium afterwards applied in paying up share capital shall be treated as new consideration also for that share capital, except in so far as the premium has been taken into account under section 211(5) so as to enable a distribution to be treated as a repayment of share capital.
(6)M16Subject to subsection (7) below, no consideration derived from the value of any share capital or security of a company, or from voting or other rights in a company, shall be regarded for the purposes of this Part as new consideration received by the company unless the consideration consists of—
(a)money or value received from the company as a qualifying distribution;
(b)money received from the company as a payment which for those purposes constitutes a repayment of that share capital or of the principal secured by the security; or
(c)the giving up of the right to the share capital or security on its cancellation, extinguishment or acquisition by the company.
(7)No amount shall be regarded as new consideration by virtue of subsection (6)(b) or (c) above in so far as it exceeds any new consideration received by the company for the issue of the share capital or security in question or, in the case of share capital which constituted a qualifying distribution on issue, the nominal value of that share capital.
(8)M17Where two or more companies enter into arrangements to make distributions to each other’s members, all parties concerned (however many) may for the purposes of this Part be treated as if anything done by any one of those companies had been done by any of the others.
(9)M18A distribution shall be treated under this Part as made, or consideration as provided, out of assets of a company if the cost falls on the company.
(10)M19References in this Part to issuing share capital as paid up apply also to the paying up of any issued share capital.
(11)M20Where securities are issued at a price less than the amount repayable on them, and are not [F20listed] on a recognised stock exchange, the principal secured shall not be taken for the purposes of this Part to exceed the issue price, unless the securities are issued on terms reasonably comparable with the terms of issue of securities so [F20listed].
(12)M21For the purposes of this Part a thing is to be regarded as done in respect of a share if it is done to a person as being the holder of the share, or as having at a particular time been the holder, or is done in pursuance of a right granted or offer made in respect of a share; and anything done in respect of shares by reference to share holdings at a particular time is to be regarded as done to the then holders of the shares or the personal representatives of any share holder then dead.
This subsection shall apply in relation to securities as it applies in relation to shares.
Textual Amendments
F20Words in s. 254(11) substituted (with effect in accordance with Sch. 38 para. 6(6) of the amending Act) by Finance Act 1996 (c. 8), Sch. 38 para. 6(1)(2)(d)
Marginal Citations
M13Source—1970 s.237(1), (3), (5); 1972 Sch.22 10(4)
M14Source—1972 Sch.22 10(1)-(3)
M15Source—1970 s.237(1)
M16Source—1972 Sch.22 8
M17Source—1972 Sch.22 9
M18Source—1970 s.237 (2)
M19Source—1970 s.237(4)
M20Source—1970 s.237(6)
M21Source—1970 s.237(7)
F21. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F21S. 255 repealed (with effect in accordance with Sch. 3 para. 23(2) of the repealing Act) by Finance Act 1998 (c. 36), Sch. 3 para. 23(1), Sch. 27 Pt. 3(2), Note
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