# Income Tax (Trading and Other Income) Act 2005, Section 456: Securities issued to connected persons etc. at excessive price: subsequent transfers to connected persons

Extent: E+W+S+N.I.

(1) 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.
(2) Condition A is that the transferor acquired the security on its issue.
(3) 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.
(4) Condition C is that at that time the transferor was connected with the issuer.
(5) Condition D is that at that time the issuer was a close company.
(6) 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.
(7) 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).
(8) In this section “control” has the meaning given by sections 450 and 451 of CTA 2010.

---
Source: https://www.legislation.gov.uk/ukpga/2005/5/section/456 (the official version)
Page: https://openlegislation.uk/income-tax-trading-and-other-income-act-2005/section-456
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.