Securities with Artificially Depressed Value
What is an artificially depressed market value?
The provisions in Chapter 3A apply where the market value of employment-related securities (or other relevant securities or interests in securities) is reduced by things done otherwise than for genuine commercial purposes.
Otherwise than for genuine commercial purposes
Per ITEPA03/S446A, the following are among the things that are, for the purposes of Chapter 3A, done otherwise than for genuine commercial purposes:
- Anything done that has as its main purpose (or one of its main purposes) the avoidance of tax or NIC; and
- Non-arm’s length transaction between members of a group of companies other than payments for group relief (ICTA88/S402 (6)). In this context “group” means a company and its 51% subsidiaries.
See examples at ERSM50030.