Commentary

D1.338 Relief for convertible shares

Corporate tax
Corporate tax | Commentary

D1.338 Relief for convertible shares

Corporate tax | Commentary

D1.338 Relief for convertible shares

Securities are convertible securities if1:

  1.  

    •     they confer on the holder an immediate or conditional right to convert them to different securities

  2.  

    •     there is an agreement or arrangement under which such rights will be granted in certain circumstances, or

  3.  

    •     there is an agreement or arrangement under which a person other than the holder may convert the securities

Shares are convertible shares if they are convertible securities; or an interest in such securities2.

'Original' relief is given on the award of convertible shares. If there is a further chargeable event, 'additional' relief is available as discussed below.

Original relief

Relief is given on the award of convertible shares. Where the convertible shares are also restricted shares, the original relief is the greater of the amounts described below and those described in D1.3373.

A just and reasonable apportionment of the relief is made where the consideration is given partly for other matters or the award or grant was given in part for the purposes of a non-qualifying business4.

Prior to 1 December 2016 any £2,000 payment deemed to have been made by an employee shareholder (on or after 1

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