Part 13 U.K. Tax avoidance

Chapter 1 U.K. Transactions in securities

[F1 Person liable to counteraction of income tax advantages U.K.

Textual Amendments

F1 Ss. 682-687 and cross-headings substituted (8.4.2010 with effect in accordance with Sch. 12 para. 15(1) of the amending Act) for s. 682-694 and cross-headings by Finance Act 2010 (c. 13), Sch. 12 para. 2

686 Excluded circumstances: fundamental change of ownership U.K.

(1) Circumstances are excluded by this section if—

(a) immediately before the transaction in securities (or the first of the transactions in securities) the person (referred to in this section as “the party”) holds shares or an interest in shares in the close company, and

(b) there is a fundamental change of ownership of the close company.

(2) There is a fundamental change of ownership of the close company if—

(a) as a result of the transaction or transactions in securities, conditions A, B and C are met, and

(b) those conditions continue to be met for a period of 2 years.

(3) Condition A is that at least 75% of the ordinary share capital of the close company is held beneficially by—

(a) a person who is not connected with the party and has not been so connected within the period of 2 years ending with the day on which the transaction in securities (or the first of the transactions in securities) takes place, or

(b) persons none of whom is so connected or has been so connected within that period.

(4) Condition B is that shares in the close company held by that person or those persons carry an entitlement to at least 75% of the distributions which may be made by the company.

(5) Condition C is that shares so held carry at least 75% of the total voting rights in the close company.]