In response to a CIOT submission seeking clarification on the meaning of ‘ordinary share capital’ with respect to fixed-rate shares HMRC have confirmed that whether shares are cumulative or not has no bearing on whether they carry a dividend at a fixed rate. Part of HMRC’s guidance had not been correctly updated following the Warshaw case ([2021] STC 247) and this will now be rectified with necessary changes being made to the illustrative table in HMRC’s Company Taxation Manual at CTM00514.
HMRC’s response notes that other than where the answer is clear ‘whether or not shares are “ordinary share capital” can only be conclusively determined on the basis of the wording in the legislation. Section 987 ITA 2007 is clear that this includes all issued share capital however described except for the capital which only gives a right to a dividend at a fixed...
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In response to a CIOT submission seeking clarification on the meaning of ‘ordinary share capital’ with respect to fixed-rate shares HMRC have confirmed that whether shares are cumulative or not has no bearing on whether they carry a dividend at a fixed rate. Part of HMRC’s guidance had not been correctly updated following the Warshaw case ([2021] STC 247) and this will now be rectified with necessary changes being made to the illustrative table in HMRC’s Company Taxation Manual at CTM00514.
HMRC’s response notes that other than where the answer is clear ‘whether or not shares are “ordinary share capital” can only be conclusively determined on the basis of the wording in the legislation. Section 987 ITA 2007 is clear that this includes all issued share capital however described except for the capital which only gives a right to a dividend at a fixed...
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