Part 13Tax avoidance

Chapter 1Transactions in securities

Circumstances in which income tax advantages obtained or obtainable

690Receipt of assets of relevant company (circumstance E)

1

This section applies in relation to a person if subsections (2) to (4) and (7) apply.

2

The person receives consideration in connection with—

a

the direct or indirect transfer of assets of a relevant company (see section 691) to another such company, or

b

any transaction in securities in which two or more relevant companies are concerned.

3

The consideration is or represents the value of assets which—

a

are available for distribution by way of dividend by a relevant company,

b

would have been so available apart from anything done by the company, or

c

are trading stock of a relevant company.

4

The consideration consists of any share capital or any security issued by a relevant company.

5

So far as subsection (4) relates to share capital other than redeemable share capital, it applies only so far as the share capital is repaid (in a winding up or otherwise).

6

The reference in subsection (5) to the repayment of share capital includes a reference to any distribution made in respect of any shares in a winding up or dissolution of the company.

7

The person does not pay or bear income tax on the consideration (apart from this Chapter).

8

In this section—

a

references to the receipt of consideration include references to the receipt of any money or money's worth,

b

“security” has the meaning given in section 254(1) of ICTA (interpretation of Part 6 of ICTA: company distributions, tax credits etc), and

c

“share” includes stock and any other interest of a member in a company.