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HMRC internal manual

Company Taxation Manual

Particular topics: transactions in securities: definitions: securities and transaction in securities


This is an extended definition in ITA/S713.  It includes shares and stock plus any interest held as a member of a company including a company not limited by shares, such as a company limited by guarantee or an unlimited company.  This list is not exhaustive.

Transactions in securities

These are transactions, of whatever description, relating to securities (ITA07/S684) including (but not limited to)

  • the purchase, sale or exchange of securities,
  • the issue, or securing the issue, of new securities,
  • applying or subscribing for new securities, and
  • altering or securing the alteration of rights attached to securities.

An officer who is aware of a transaction in securities “of whatever nature” will need to consider whether the legislation applies.  Clearance & Counteraction Team will advise.  See CTM36860.

The courts have held that the following are transactions in securities:

Redemption of a security IRC v Parker (1966) 43TC396
Alteration of rights attaching to a security (in this case through liquidation agreement) IRC v Joiner (1975) 50TC499
Loans made by a company to individuals who subsequently acquired the company Williams v IRC (1979) 54TC257

The payment of a dividend is not a transaction in securities.  In IRC v Laird [2003] UKHL 54 Lord Millett explained that “the distribution of the undistributed profits of a company to the shareholders entitled thereto merely gives effect to the rights attaching to the shares”.