I6.111 Alteration in unquoted securities of close companies
IHTA 1984, s 98 provides that the following are treated as a disposition made by the participators of a close company1:
• any alteration in, or extinguishment2 of, that company's unquoted share or loan capital3, or
• any alteration in, or extinguishment4 of, rights attaching to any shares in, or debentures of, that company which are unquoted5
'Unquoted' here means not listed on a recognised stock exchange or dealt in on the Alternative Investment Market (AIM) (formerly the USM)6 Both tiers of the NASDAQ stock market were accorded 'recognised stock exchange' status by HMRC from 10 March 1992. For a list of overseas stock exchanges recognised by HMRC see HMRC Recognised stock exchanges.
IHTA 1984, s 98 therefore catches two different types of transaction.
Firstly, the alteration of the company's share capital, for example allowing the intended beneficiary to subscribe for shares at par when the shares already in existence carry a premium.
Secondly, the alteration of rights attaching to those shares,
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