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HMRC internal manual

Corporate Finance Manual

Loan relationships: special types of security: deeply discounted securities and close companies: participation: example

Participation: example

FH Ltd is a close company with £100 issued ordinary share capital, held as follows.

Jay Brown 25
Marby Ltd 25
L Smith 25
KL Ltd 25

FH Ltd issues relevant discounted securities with redemption amounts totalling £10,000 as shown below.

Jay Brown £1,000
K Brown (son of Jay Brown) £5,000
Marby Ltd £2,000
Kibbo Ltd (subsidiary of Marby Ltd) £1,000
GT Ltd (company 100% owned by L Smith) £1,000

CTA09/409 applies to all the creditors.

Jay Brown Participator
K Brown Associate of participator
Marby Ltd Participator
Kibbo Ltd Company controlled by a participator
GT Ltd Company controlled by a participator.