CTM36841 - Particular topics: transactions in securities: clearance procedure: application

Under ITA07/S701 (1) a person who effects or is to effect a transaction or transactions potentially subject to notice of counteraction, may apply for a clearance, in which case they should provide particulars to HMRC accordingly. ITA07/S701 (2) requires HMRC to notify the person within 30 days of receiving the particulars of any further information they require if they consider the information provided insufficient. If this is not provided within 30 days of the request, or within such further time as HMRC may allow, the application will lapse: ITA07/S701 (3).

ITA07/S702 (4) provides that any notification given by HMRC (see CTM36845) is void if particulars, and any further information requested, do not fully and accurately disclose all facts and considerations which are material to the application. Any tax considerations relating to the transactions are considered material and should be included in the application.

The following material should also be included where relevant:

  • The full names of the parties to the transactions, including the companies and their participators together with the names of any persons who are helping to finance the transactions;
  • The companies’ registration numbers, the nature of their activities and the activities of their group;
  • Details of any associates or connected parties to the transactions;
  • The commercial background and reasons for the transactions;
  • The steps by which the transactions will be carried out - this should include full details of the share capital of the companies extending to details of rights attached to different classes of shares and securities;
  • Details of any consideration to be given for the transactions, to include
    • the amount and type of consideration
    • nature of consideration if not cash
    • details of the terms and rights attached to securities and loans and provisions for repayment.

A table of share capital held before and after the transactions is helpful and can avoid further information requests, especially if it includes details of the consideration as described above.