Corporation Tax Act 2009 section 530

The redemption return condition: excepted shares

Section 530 identifies which types of redeemable shares are excluded from meeting the redemption return condition set out in section 529, and therefore cannot cause a loan relationship to arise.

• Certain redeemable shares are carved out from the redemption return condition, meaning they are treated as ordinary shares rather than disguised debt.
• The exclusion applies where the shares are held by persons not connected with the issuing company, ensuring that genuinely independent shareholdings are not caught.
• "Persons" in this context covers both companies and individuals, using the standard definition of connected persons found in section 1316 of the Corporation Tax Act 2009.
• The section replaces the previous concept of "independent person" used in the Finance Act 1996, substituting the actual statutory definition to avoid confusion with a different use of the same term elsewhere in that Act.