A share less ordinary?

KEY POINTS

• Why is the concept important?
• Defining 'company' and overseas comparisons.
• Determining the existence of 'capital'.
• Is there a 'share' and relevant legal decisions?
• Have the shares been issued?

HMRC have recently published Revenue & Customs Brief 54/07 on the meaning of 'ordinary share capital' (the publication can be viewed at www.hmrc.gov.uk/briefs/company-tax/brief5407.htm). While the concept of ordinary share capital is important in a number of areas it has become much more of a concern since the substantial shareholdings exemption was enacted in FA 2002 as we shall see shortly. Brief 54/07 was written with input from the tax profession and clearly reflects the various enquiries and Code of Practice 10 applications that HMRC have received over the last five years or so.

This article is intended to put Brief 54/07 into...