Income Tax (Trading and Other Income) Act 2005 section 414A

Interpretation of Chapter

Section 414A defines the key terms and rules of interpretation used throughout this Chapter, including the meanings of "bonus share capital" and "share", and sets out how share capital issued in lieu of a cash dividend and cross-company distribution arrangements are to be treated.

• Bonus share capital is share capital issued without full new consideration, or the portion of any issue that cannot be attributed to new consideration.
• Share capital is treated as issued in lieu of a cash dividend where it results from someone exercising (or failing to exercise) an option to receive either cash or additional shares.
• "Share" is broadly defined to include stock and any other interest a member holds in a company.
• Where two or more companies arrange to make distributions to each other's members, each company's actions may be attributed to any of the others for the purposes of this Chapter.