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HMRC internal manual

Corporate Finance Manual

Deemed loan relationships: shares with guaranteed returns: non-qualifying shares: the redemption return condition: meaning of excepted share

Excepted shares

This guidance applies to companies that hold shares up to 21 April 2009

There are three filters built into CTA09/S529 to exclude shares which would otherwise be caught by these provisions but which are being used for normal commercial purposes where there is no tax avoidance. Two of the filters are absolute (although the qualifying publicly issued share filter is subject to part of the unallowable purpose test) and the third depends on the purpose for which the investing company acquires the share.

CTA09/S530 provides that a share is an excepted share if:

  • it is a qualifying publicly issued share (see CFM45220),
  • it is a share which mirrors a public issue (see CFM45230), or
  • the investing company’s purpose in acquiring the share is not an unallowable purpose (see CFM45240).