CFM37280 - Loan relationships: special types of security: deeply discounted securities and close companies: participation: example

Participation: example

FH Ltd is a close company with £100 issued ordinary share capital, held as follows.

  • Jay Brown - 25
  • Marby Ltd - 25
  • L Smith - 25
  • KL Ltd - 25

FH Ltd issues relevant discounted securities with redemption amounts totalling £10,000 as shown below.

  • Jay Brown - £1,000
  • K Brown (son of Jay Brown) - £5,000
  • Marby Ltd - £2,000
  • Kibbo Ltd ( subsidiary of Marby Ltd) - £1,000
  • GT Ltd ( company 100% owned by L Smith) - £1,000

CTA09/409 applies to all the creditors.

  • Jay Brown - Participator
  • K Brown - Associate of participator
  • Marby Ltd - Participator
  • Kibbo Ltd - Company controlled by a participator
  • GT Ltd - Company controlled by a participator