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Share capital
HMRC say that they cannot provide a list of foreign entities that they consider to have 'ordinary share capital' for the purposes of TA 1988, s 832 as each case will have its own particular set of facts. Thus it is not feasible for an exhaustive list to be created.
Share capital
HMRC say that they cannot provide a list of foreign entities that they consider to have 'ordinary share capital' for the purposes of TA 1988, s 832 as each case will have its own particular set of facts. Thus it is not feasible for an exhaustive list to be created.
In Revenue and Customs Brief 54/07, HMRC set out their interpretation of s 832 and information that, it is hoped, will be useful to companies and advisers, as well as officers within HMRC, in deciding whether a particular non-UK entity has 'ordinary share capital' for the purposes of s 832. Also included are some details of HMRC's position on two of the most often queried foreign entities, the Delaware LLC and the German GmbH.
Ordinary share capital is defined in the section as follows:
'“ordinary share capital”, in relation to a company, means all the issued share capital (by whatever name called) of the company, other than capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the company.'
This definition therefore includes all of the issued share capital of a company, apart from capital carrying a right to a dividend at a fixed rate only. The bracketed wording 'by whatever name called' should not be overlooked as it is important to note that companies often categorise share capital into shares bearing different names, for purposes which may be of no relevance to the application of the definition above.
Readers are referred to the brief for full details. An article on share capital will appear in a future edition of the magazine shortly.
HMRC Brief 54/07, 3 August 2007
