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Section 554I(4) ITEPA 2003

This page defines ‘relevant shares�.

‘Relevant shares� is a technical term in Part 7A ITEPA 2003.

In sections 554J to 554M and 554Z7, ‘relevant shares� means:

• shares (including stock) in B,
• instruments issued by B which are securities for the purposes of Part 7 Chapters 1 to 5 ITEPA 2003 within section 420(1)(b) ITEPA 2003 see ERSM20140, or
• units in a collective investment scheme (as defined in section 420(2) ITEPA 2003) managed by B which are securities for the purposes of Part 7 Chapters 1 to 5 ITEPA 2003 within section 420(1)(e) see ERSM20170.

Securities within section 420(1)(b) ITEPA 2003 are, broadly speaking, debt instruments.

Groups

If B is a member of a group of companies, ‘B� in that definition includes any other company which is a member of that group.

To decide whether B is a member of a group, you apply the rules for corporation tax on chargeable gains (see CG45100 onwards) with one modification.

The chargeable gains test is a 75% test. For the purposes of section 554I(4), you change �75%� to �51%� throughout.

‘Relevant shares� and ‘securities�

Section 420 ITEPA 2003 gives ‘securities� a wide definition for the purposes of Part 7 Chapters1 to 5 ITEPA 2003. Section 554I(4) gives ‘relevant shares� a narrower definition. Therefore, ‘securities� within section 420 will not necessarily be ‘relevant shares� within section 554I(4).