Corporation Tax Act 2010 section 158

Meaning of "equity holder"

Section 158 defines who counts as an "equity holder" of a company for the purposes of the group relief rules on equity holders and profit or asset distribution.

• An equity holder is either a holder of ordinary shares in the company or a loan creditor whose loan is not a normal commercial loan.
• A loan creditor is someone owed money by the company in respect of redeemable loan capital, borrowed money, acquired capital assets, income rights created in the company's favour, or consideration worth substantially less than the debt.
• A bank lending money to the company in the ordinary course of its banking business is not treated as a loan creditor for these purposes.
• The definition of equity holder is also subject to additional rules in section 159 concerning the use of the company's assets.