Income Tax Act 2007 section 566

Meaning of "UK shares" and "UK securities"

Section 566 defines what counts as "UK shares" and "UK securities" for the purposes of the manufactured payments rules in this Part of the Act.

• UK shares are shares in UK-resident companies, including both ordinary and preference shares, which are capable of producing dividend income.
• UK securities are UK government securities (gilts) and other loan stock or bonds issued by UK entities that produce interest income.
• The term "UK shares" is used for income tax purposes instead of the older label "United Kingdom equities", even though the definition covers preference shares as well as ordinary shares.
• These definitions are important because they determine which manufactured payment rules apply when shares or securities are lent or sold under repo or stock lending arrangements.