Income Tax Act 2007 section 135

Subscriptions for shares

Section 135 defines what it means to subscribe for shares in a company and sets out the circumstances in which a person is treated as having subscribed for shares, including transfers between spouses or civil partners and the issue of bonus shares. This section applies only to shares to which Enterprise Investment Scheme (EIS) relief is not attributable.

• An individual subscribes for shares when the company issues them in return for money or money's worth — this section only applies where EIS relief does not attach to the shares.
• Where a person transfers shares to their spouse or civil partner during their lifetimes, the recipient is treated as having subscribed for those shares themselves.
• The spouse or civil partner treatment extends through chains — if the transferor was themselves only treated as a subscriber (for example, through a prior spousal transfer or through bonus share rules), the recipient still inherits that treated status.
• Where bonus shares are issued to an individual in respect of shares they subscribed for (or are treated as having subscribed for), the individual is also treated as having subscribed for the bonus shares.