CFM37280 | Loan relationships: special types of security: deeply discounted securities and close companies: participation: example

Participation: example

FH Ltd is a close company with £100 issued ordinary share capital, held as follows.

• Jay Brown - 25

• Marby Ltd - 25

• L Smith - 25

• KL Ltd - 25

FH Ltd issues relevant discounted securities with redemption amounts totalling £10,000 as shown below.

• Jay Brown - £1,000

• K Brown (son of Jay Brown) - £5,000

• Marby Ltd - £2,000

• Kibbo Ltd ( subsidiary of Marby Ltd) - £1,000

• GT Ltd ( company 100% owned by L Smith) - £1,000

CTA09/409 applies to all the creditors.

• Jay Brown - Participator

• K Brown - Associate of participator

• Marby Ltd - Participator

• Kibbo Ltd - Company controlled by a participator

• GT Ltd - Company controlled by a participator