Section 521D | Excepted shares

(1)A share is an excepted share for the purposes of section 521C if it is—

(a)a qualifying publicly-issued share (see subsection (2)), or

(b)a share which mirrors a public issue (see subsections (3) and (4)).

(2)A share is a “qualifying publicly-issued share” if—

(a)it was issued by a company as part of an issue of shares to persons not connected with the company, and

(b)less than 10% of the shares in that issue are held by the investing company or persons connected with it.

(3)The first case where shares (“the mirroring shares”) mirror a public issue is where—

(a)a company (“company A”) issues shares (“the public issue”) to persons not connected with the company,

(b)within 7 days of that issue, one or more other companies (“companies BB”) issue the mirroring shares to company A on the same terms as the public issue or substantially the same terms,

(c)company A and companies BB are associated companies (see subsection (5)), and

(d)the total nominal value of the mirroring shares does not exceed the nominal value of the public issue.

(4)The second case where shares (“the second level mirroring shares”) mirror a public issue is where, in the circumstances of the first case—

(a)within 7 days of the public issue, one or more other companies (“companies CC”) issue the second level mirroring shares to one or more of companies BB on the same terms as the public issue or substantially the same terms,

(b)company A, companies BB and companies CC are associated companies (see subsection (5)), and

(c)the total nominal value of the second-level mirroring shares does not exceed the nominal value of the public issue.

(5)For the purposes of subsections (3) and (4) companies are associated companies if they are members of the same group of companies for the purposes of Part 5 of CTA 2010 (group relief) (see section 152 of that Act).