CTM36823 | Particular topics: transactions in securities: condition B

Condition B is met where

• the person receives relevant consideration in connection with the transaction or transactions,

• two or more close companies are concerned in the transaction or transactions, and

• the person does not bear Income Tax on the consideration.

Relevant consideration – condition B

Relevant consideration under condition B means consideration which consists of any share capital or other interest of a member in a company, or any security issued by a close company which represents the value of assets which

• are available for distribution by way of dividend by the company (that is, the same company that issued the security),

• would have been available for distribution apart from anything done by the company, or

• comprises trading stock of the company.

Where the share capital in question is not redeemable share capital, these provisions apply only so far as the share capital is repaid, whether on a winding-up or otherwise.