Section 225 | Insignificant repayments ignored for purposes of section 224

(1)A repayment is ignored for the purposes of section 224 (repayments etc of share capital to other persons) if both—

(a)the market value of the shares to which it relates (“the target shares”) immediately before the event occurs, and

(b)the amount received by the member in question,

are insignificant in relation to the market value of the remaining issued share capital of the issuing company (or, as the case may be, the subsidiary) immediately after the event occurs.This is subject to subsection (3).

(2)For the purposes of subsection (1) it is assumed that the target shares are cancelled at the time the repayment is made.

(3)Subsection (1) does not apply if repayment arrangements are in existence at any time in the period—

(a)beginning 12 months before the issue of the relevant shares, and

(b)ending at the end of the issue date.

(4)For this purpose “repayment arrangements” means arrangements which provide—

(a)for a repayment by the issuing company or any subsidiary of that company (whether or not it is such a subsidiary at the time the arrangements are made), or

(b)for anyone to be entitled to such a repayment,

at any time in period C relating to the relevant shares.