Section 407 | Events counting as recovery of capital for section 406

(1)An individual is treated as having recovered an amount of capital from a company for the purposes of section 406 if—

(a)the individual receives consideration of that amount or value—

(i)for the sale, exchange or assignment of part of the ordinary share capital of the company,

(ii)by way of repayment of part of that ordinary share capital, or

(iii)for assigning a debt due to the individual from the company, or

(b)the company repays that amount of a loan or advance from the individual.

(2)An individual is treated as having recovered an amount of capital from a partnership for those purposes if—

(a)the individual receives consideration of that amount or value—

(i)for the sale, exchange or assignment of part of the individual's interest in the partnership, or

(ii)for assigning a debt due to the individual from the partnership, or

(b)the partnership repays that amount of a loan or advance from the individual, or

(c)the partnership returns that amount of capital to the individual.

(3)An individual is treated as having recovered an amount of capital from a co-operative for those purposes if—

(a)the individual receives consideration of that amount or value—

(i)for the sale, exchange or assignment of part of the individual's shares in the co-operative,

(ii)by way of repayment of part of the individual's shares in the co-operative, or

(iii)for assigning a debt due to the individual from the co-operative, or

(b)the co-operative repays that amount of a loan or advance from the individual.

(4)A sale or assignment that is not a bargain made at arm's length is treated for the purposes of this section as being made for a consideration of an amount equal to the market value of what is disposed of.