Section 361C | The equity-for-debt exception

(1)For the purposes of section 361 the “equity-for-debt exception” applies if the following two conditions are met.

(2)The first condition is that the acquisition is an arm's length transaction.

(3)The second condition is that the consideration given by C for the acquisition consists only of—

(a)shares forming part of the ordinary share capital of C,

(b)shares forming part of the ordinary share capital of a company connected with C, or

(c)an entitlement to shares within paragraph (a) or (b).