Section 1015 — Corporation Tax Act 2010: Meaning of “special securities”

Meaning of “special securities” 1015 1 Securities of a company are special securities for the purposes of paragraph F in section 1000(1) if they meet any of conditions A to E. 1A But hybrid capital instruments (within the meaning of section 475C of CTA 2009) are not special securities by reason of meeting condition E.

2 Condition A is that the securities are issued as described in paragraph D in section 1000(1) (securities issued otherwise than for new consideration).

3 Condition B is that—

a the securities—

i are convertible (directly or indirectly) into shares in the company, or ii carry a right to receive shares in or securities of the company, and b the securities are neither listed on a recognised stock exchange nor issued on terms which are reasonably comparable with the terms of issue of securities listed on a recognised stock exchange.

4 Condition C is that under the securities the consideration given by the company for the use of the principal secured depends (to any extent) on the results of—

a the company's business, or b any part of the company's business.

5 Condition D is that the securities are connected with shares in the company (see section 1017(2)).

6 Condition E is that the securities are equity notes—

a issued by the company (“the issuing company”),

and b held by a company which—

i is associated with the issuing company, or ii is a funded company (see section 1017(3)).