CTM81105 | Groups & consortia: groups - entitlement to profits or assets available for distribution: option, limited & varying rights
From HM Revenue & Customs · Company Taxation Manual
to S178
Where there are option rights ( to ) and also:
shares with limited rights ( and ), and/or
shares with varying rights ( and ),there are eight different possible calculations of entitlements to profits and of assets in a winding-up as below.
The eight possible combinations are:
option rights treated as effective, rights of a different accounting period, treating limited rights as waived,
option rights treated as effective, rights of the current accounting period, treating limited rights as waived,
option rights treated as effective, rights of a different accounting period, no special treatment of limited rights,
option rights treated as effective, rights of the current accounting period, no special treatment of limited rights,
option rights ignored, rights of a different accounting period, treating limited rights as waived,
option rights ignored, rights of the current accounting period, treating limited rights as waived,
option rights ignored, rights of a different accounting period, no special treatment of limited rights,
option rights ignored, rights of the current accounting period, no special treatment of limited rights.
| Rights of current accounting period | Rights of a different accounting period |
|---|---|
| Option rights effective, Limited rights waived | Option rights effective, Limited rights waived |
| Option rights effective, No special treatment of limited rights | Option rights effective, No special treatment of limited rights |
| Option rights ignored, Limited rights waived | Option rights ignored, Limited rights waived |
| Option rights ignored, No special treatment of limited rights | Option rights ignored, No special treatment of limited rights |
The lowest percentage is taken as the percentage to which the parent company is entitled.