414AInterpretation of Chapter

1

In this Chapter “bonus share capital” means—

a

share capital issued otherwise than wholly for new consideration, or

b

the part (if there is such a part) of any share capital so issued that is not properly referable to new consideration.

2

For the purposes of this Chapter share capital is issued by a company in lieu of a cash dividend if—

a

it is issued in consequence of the exercise by any person of an option conferred on the person, and

b

that option is an option to receive, in respect of shares in the company, either a dividend in cash or additional share capital.

3

For the purposes of subsection (2), an option to receive either a dividend in cash or additional share capital is conferred on a person not only—

a

if the person is required to choose one or the other, but also

b

if the person is offered the one subject to a right, however expressed, to choose the other instead.

4

The reference in subsection (2) to a person's exercise of an option includes a person's abandonment of, or failure to exercise, a right such as is mentioned in subsection (3)(b).

5

In this Chapter “share” includes stock, and any other interest of a member in a company.

6

If two or more companies enter into arrangements to make distributions to each other's members, all parties concerned (however many) may, for the purposes of this Chapter, be treated as if anything done by any one of those companies had been done by any one of the others.

7

The following apply in relation to this Chapter as they apply in relation to Part 23 of CTA 2010—

a

section 1113 (“in respect of shares”) of CTA 2010,

b

section 1115 (“new consideration”) of CTA 2010.