Section 171 — Corporation Tax Act 2010: Shares or securities with temporary rights

Shares or securities with temporary rights 171 1 Section 172 applies if, at the relevant time, one or more of the participating equity holders holds, as such, shares or securities—

a which have rights within subsection (2), or b in relation to which arrangements within subsection (3) are in place.

2 The rights within this subsection are distribution rights of such a kind that if—

a the profit distribution were to be made, or b the notional winding up were to occur, at a time after the relevant accounting period, the equity holder's entitlement at that time would be different from the equity holder's entitlement at the relevant time.

3 The arrangements within this subsection are arrangements of such a kind that if—

a effect were to be given to the arrangements, and b the profit distribution were to be made, or the notional winding up were to occur, at a time after the relevant accounting period, then, as a result of effect being given to the arrangements, the equity holder's entitlement at that time would be different from the equity holder's entitlement at the relevant time.

4 The references in subsections (2) and (3) to the equity holder's entitlement at a time are references to the proportion to which the equity holder would be beneficially entitled (as the case may be)—

a of profits on the profit distribution if it were made at that time, or b of assets on the notional winding up if it occurred at that time.