Section 361C — Corporation Tax Act 2009: The equity-for-debt exception

The equity-for-debt exception 361C 1 For the purposes of section 361 the “equity-for-debt exception” applies if the following two conditions are met.

2 The first condition is that the acquisition is an arm's length transaction.

3 The second condition is that the consideration given by C for the acquisition consists only of—

a shares forming part of the ordinary share capital of C, b shares forming part of the ordinary share capital of a company connected with C, or c an entitlement to shares within paragraph (a) or (b).