»Ê¹ÚÌåÓýapp

CTA10/S171 applies where, in the relevant accounting period (CTM81005),

• an equity holder holds, as such (CTM81010), any shares or securities, and

• certain arrangements exist in respect of those shares or securities.»Ê¹ÚÌåÓýappse arrangements are confined to those that could vary the rights attaching to shares or securities. Following J Sainsbury Plc v O’Connor 64TC208 they do not include arrangements that could affect the ownership of shares.

  »Ê¹ÚÌåÓýapp arrangements within section 171 are those as a result of which an equity holder’s entitlement to profits or to assets in a winding-up could be different in the accounting period, or in any later accounting period, compared with what the entitlement would be if the arrangements did not come into effect.

  Under section 171 it is assumed that the effect would be given to the arrangements. »Ê¹ÚÌåÓýapp shares or securities are then treated as though any variation in the equity holder’s entitlement to profits or to assets in a winding-up was the result of the operation of varying rights (CTM81070 to CTM81080).