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- Point in Time (16/01/2012)
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Version Superseded: 17/07/2012
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Corporation Tax Act 2010, Section 528 is up to date with all changes known to be in force on or before 19 August 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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(1)Condition A is that the company is a UK company.
(2)Condition B is that section 236 of FISMA 2000 (open-ended investment companies) does not apply to the company.
(3)Condition C is that the shares forming the company's ordinary share capital are listed on a recognised stock exchange.
(4)Condition D is that the company [F1meets the non-close condition.]
F2(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F3(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[F4(4C)The non-close condition is met—
(a)in relation to a company, if—
(i)it is not a close company, or
(ii)it is a close company but only because it has an institutional investor as a direct or indirect participator, and
(b)in relation to a person or scheme other than a company, if it would fall within paragraph (a)(i) or (ii) if—
(i)the person’s business or the scheme were a company, and
(ii)the interests of persons in the business or scheme were shares in the company.]
(5)For the purposes of [F5determining whether the non-close condition is met] a company is to be treated as a close company if it is prevented from being a close company only by section 444 or 447(1)(a).
[F6(5B)For the purposes of subsection (4C)(a)(ii)—
(a)a person is a “direct participator” if the person is a participator for the purposes of Part 10 of CTA 2010 (see section 454), and
(b)a person is an “indirect” participator in a company if the person has a share or interest in the capital or income of the company through another body corporate or other bodies corporate.
(5C)In determining whether a person is an indirect participator—
(a)reference to having a share or interest in the capital or income of a company through a body corporate is to be read in accordance with sub-paragraphs (9) and (10) of paragraph 46 of Schedule 5AAA to TCGA 1992 (meaning of direct or indirect participator), and
(b)a person is regarded for the purposes of those sub-paragraphs, and for the purposes of subsection (5B)(b) of this section, as having a share or interest in the capital or income of a company if the person would be a participator in the company as a result of section 454(2) of CTA 2010.]
(6)Condition E is that—
(a)each share issued by the company either—
(i)forms part of the company's ordinary share capital, or
(ii)is a non-voting restricted preference share, and
(b)there is no more than one class of ordinary share issued by the company.
(7)For the purposes of condition E—
(a)“ ” means a share which is a restricted preference share (within the meaning of section 160) or would be but for the fact that it carries a right of conversion into shares or securities in the company, and
(b)a share is “non-voting” if it carries no right to vote at a general meeting of the company or if it carries a right to vote which is contingent on the non-payment of a dividend and which has not become exercisable.
(8)Condition F is that in the case of a loan in respect of which the company is a debtor—
(a)the loan creditor is not entitled to an amount by way of interest which depends to any extent on the results of all or part of the company's business or on the value of any of the company's assets,
(b)the loan creditor is not entitled to an amount by way of interest which exceeds a reasonable commercial return on the consideration lent, and
(c)the loan creditor is entitled on repayment to an amount which either does not exceed the consideration lent or is reasonably comparable with the amount generally repayable (in respect of an equal amount of consideration) under the terms of issue of securities listed on a recognised stock exchange.
(9)For the purposes of condition F a loan is not dependent on the results of the company's business merely because the terms of the loan provide—
(a)for the interest to be reduced in the event of the results improving, or
(b)for the interest to be increased in the event of the results deteriorating.
Textual Amendments
F1Words in s. 528(4) inserted (retrospectively) by Finance Act 2024 (c. 3), Sch. 7 para. 3(2)(a)(6)
F2S. 528(4)(a) omitted (retrospectively) by virtue of Finance Act 2024 (c. 3), Sch. 7 para. 3(2)(b)(6)
F3S. 528(4)(b) omitted (retrospectively) by virtue of Finance Act 2024 (c. 3), Sch. 7 para. 3(2)(b)(6)
F4S. 528(4C) inserted (retrospectively) by Finance Act 2024 (c. 3), Sch. 7 para. 3(3)(6)
F5Words in s. 528(5) substituted (retrospectively) by Finance Act 2024 (c. 3), Sch. 7 para. 3(4)(6)
F6S. 528(5B)(5C) inserted (retrospectively) by Finance Act 2024 (c. 3), Sch. 7 para. 3(5)(6)
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