Groups & consortia: groups - entitlement to profits or assets available for distribution: equity holders - notional winding-up
The percentage of the amount available for distribution to equity holders on a winding-up to which the company is entitled will depend on the rights attaching to:
- the ordinary shares (CTM81010 ordinary shares) in the subsidiary company held by the parent company,
- the loans made by the parent company to the subsidiary company which are not normal commercial loans (CTM81010 normal commercial loans), and
- the shares and loans within CTM81025 in respect of which the parent company is treated as an equity holder, and
option rights in respect of shares or securities. There is guidance on option rights in respect of shares or securities at CTM81090 to CTM81105.
This guidance is subject to CTM81055 (‘returned amounts’).
There is guidance at CTM81060 to CTM81085 on situations where an equity holder holds any shares or securities with:
- rights wholly or partly limited by reference to a specified amount or amounts, or
- rights which change for different accounting periods. You ignore amounts payable to the parent company in respect of:
- restricted preference shares, or
normal commercial loans, which are not within CTM81025.
Where an equity holder is entitled to an amount of assets of any description which would not normally be treated as a distribution of assets (for example, the amount repayable on a loan), that amount is still treated as if it were a distribution of assets to which the equity holder is entitled on a winding-up. This only applies to shares or securities or interest that an equity holder holds as such (CTM81010 equity holder as such). This treatment is subject to the guidance in CTM81060 to CTM81065.