Section 456 Securities issued to connected persons etc. at excessive price: subsequent transfers to connected persons
United Kingdom
No loss is taken to occur for the purposes of section 454 on a transfer of a deeply discounted security to a person connected with the transferor if conditions A and B and either condition C or conditions D and E are met.
Condition A is that the transferor acquired the security on its issue.
Condition B is that the amount paid by the transferor to acquire the security exceeded the market value of the security at the time of its issue.
Condition C is that at that time the transferor was connected with the issuer.
Condition D is that at that time the issuer was a close company.
Condition E is that at that time the transferor controlled that company with other persons to whom securities of the same kind were also issued.
Chapter 2 of Part 10 of CTA 2010 (meaning of “close company”) applies for the purposes of this section but with the omission of section 442(a) (exclusion of non-UK resident companies).
In this section “control” has the meaning given by F2sections 450 and 451 of CTA 2010.
Annotations
Textual amendments
- F1
S. 456(7) substituted (1.4.2010) (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 466(2) (with Sch. 2)
- F2
Words in s. 456(8) substituted (1.4.2010) (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 466(3) (with Sch. 2)
Notes on Chapter 8
Modifications
- C1
Pt. 4 Ch. 8 applied (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), ss. 406(4), 1329(1) (with Sch. 2 Pts. 1, 2)