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HMRC internal manual

Corporate Finance Manual

From
HM Revenue & Customs
Updated
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Loan relationships: special types of security: deeply discounted securities and close companies: participation

Participation

CTA09/S409 applies where the security is held, at any time in an accounting period, by

  • a participator of the issuing company or (on or after 4 March 2005) a person who controls a company which is a participator of the issuing company
  • an associate of the participator or (on or after 4 March 2005) of a person who controls a company which is a participator, or
  • a company controlled by a participator or (on or after 4 March 2005) by a person who controls a company which is a participator.

The terms ‘participator’ and ‘associate’ are explained at CFM35840 and CFM35850respectively.

See the example at CFM37280.

Control has the meaning given in CTA09/S472 - essentially having the majority of shares. There are more details about control at CFM35860.

Any securities held on trading account and owned by a person carrying on a banking business or other financial trading business are ignored when deciding whether that person is a participator.