CTM81100 - Groups & consortia: groups - entitlement to profits or assets available for distribution: option rights exist

CTA10/S174

This page applies in any case where there are option rights in existence in a relevant accounting period (CTM81005).

»Ê¹ÚÌåÓýapp guidance is expressed in terms of the profit distribution test (CTM81045), but the same principles apply for the asset distribution test (CTM81050).

In such a case, the percentage of the profits available for distribution to equity holders to which the parent company is beneficially entitled is calculated on the basis that option rights are effective (CTM81095). »Ê¹ÚÌåÓýappn the percentage of those profits to which the parent company is beneficially entitled is calculated without regard to the option rights. »Ê¹ÚÌåÓýapp lower of these two percentages is the percentage of those profits to which the parent company is beneficially entitled.

»Ê¹ÚÌåÓýappre is an example at CTM81124.

But, where there are also:

  • rights which are limited, and/or
  • rights which vary for different accounting periods,the guidance in CTM81105 applies.