HMRC internal manual

Company Taxation Manual

Particular topics: transactions in securities: Introduction

You should check the other guidance available on GOV.UK from HMRC as Brexit updates to those pages are being prioritised before manuals.

Legislation to counter advantages obtained through transactions in securities dates back to 1960 – FA60/S28.  At that time capital gains were not liable to tax and the provision was aimed at Income Tax avoidance by conversion into capital gains.

The legislation continued to be relevant after the introduction of Capital Gains Tax (CGT) because the various reliefs and exemptions, and usually lower CGT rates, made it attractive for taxpayers to undertake transactions by which they would receive capital rather than income.

The current legislation is at ITA07/PART13/CHAPTER1, S682 to S713, as amended by FA16/S33 and S34.  The legislation had also been significantly revised by FA10. 

FA16 introduced changes with effect from 6 April 2016 which clarify and extend various aspects of transactions in securities legislation.  This guidance covers the regimes before and from 6 April 2016. 

Similar legislation at CTA10/PART15 applies for the counteraction of Corporation Tax advantages obtained through transactions in securities – see CTM36835.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)