Corporation Tax Act 2009 section 521D

Excepted shares

Section 521D defines which shares are "excepted shares" and therefore excluded from the rules in section 521C that treat certain shares accounted for as liabilities as loan relationships.

• A share qualifies as an excepted share if it is either a "qualifying publicly-issued share" or a share that "mirrors a public issue"
• A qualifying publicly-issued share is one issued to independent (unconnected) persons, where the investing company and its connected persons hold less than 10% of that share issue
• Shares mirror a public issue where, within 7 days of a public share issue by a group company, associated group companies issue shares internally on the same or substantially the same terms, provided the nominal value of the mirroring shares does not exceed the nominal value of the public issue
• A second level of mirroring is permitted, allowing chains of share issues within a group, provided the same conditions on timing, terms, nominal value and group membership are met