Was the payment of a dividend in respect of shares ‘a transaction in securities’ or ‘a transaction relating to securities’ within the meaning of section 703.
Held: ‘As a matter of ordinary language, the creation, issue, sale, purchase, exchange, redemption and extinguishment of shares or debentures are all ‘transaction[s] in securities’. The word ‘securities’ includes not only stocks and shares of every description, including preference shares, but also debentures and unsecured loan notes. Appeal allowed.
Judges:
Lord Nicholls of Birkenhead, Lord Hoffmann, Lord Millett, Lord Rodger of Earlsferry, Lord Walker of Gestingthorpe
Citations:
[2003] UKHL 54, Gazette 13-Nov-2003
Links:
Statutes:
Income and Corporation Taxes Act 1988 703
Jurisdiction:
England and Wales
Citing:
Appeal from – Inland Revenue Commissioners v Laird Group plc CA 30-Apr-2002
The taxpayer had sources of foreign income. Arrangements were made to take the benefit through the payment of interim dividends, which it intended to use to set off against liability for advance corporation tax. The Commissioner contended that these . .
Cited – Inland Revenue Commissioners v Joiner HL 26-Nov-1975
HL Surtax – Tax advantage – Transaction in securities – Company recon- struction – Surplus assets o f old company distributed in voluntary liquidation – Agreement for liquidation providing for agreed methods o f . .
Cited – Inland Revenue Commissioners v Parker HL 1966
A company capitalised a sum standing to the credit of its profit and loss account and applied it in issuing redeemable debentures to its members in proportion to the amounts paid up on their shares. The company subsequently redeemed the debentures . .
Cited – Greenberg v Inland Revenue Commissioners HL 1972
A company created a new class of preferred shares which it issued credited as fully paid to its two shareholders. They sold the shares to a purchaser on terms that the price was to be paid by instalments. Under arrangements made between the parties . .
Cited – Borland’s Trustee v Steel Brothers and Co Ltd 1901
Mr Borland was a shareholder. The company’s articles contained pre-emption rights, such that on a shareholder’s bankruptcy, he had, on receiving a transfer notice from the directors, to transfer his shares to a manager or assistant at a fair value . .
Cited – Short v Treasury Commissioners CA 1948
‘shareholders are not, in the eye of the law, part owners of the undertaking’ A share is classified as a chose in action, a species of intangible personal property. . .
Lists of cited by and citing cases may be incomplete.
Corporation Tax, Company
Updated: 08 June 2022; Ref: scu.186772
