Income Tax Act 2007 section 691

Meaning of "relevant company" in sections 689 and 690

Section 691 defines the term "relevant company" as used in sections 689 and 690, which deal with the counteraction of tax advantages in certain transactions in securities.

  • This section provides the definition of "relevant company" for the purposes of the transactions in securities rules in sections 689 and 690.
  • The definition is important because it determines which companies fall within the scope of the anti-avoidance provisions relating to transactions in securities.
  • The section is derived from the former section 704D of the Income and Corporation Taxes Act 1988 (ICTA).
  • The section was subsequently amended by Finance Act 2010, Schedule 12, paragraph 2.

Example

Suppose an individual holds shares in Company A, which is under the control of five or fewer participators and meets the criteria set out in section 691. Company A would be a "relevant company" for the purposes of sections 689 and 690. If the individual then enters into a transaction in the securities of Company A that produces an income tax advantage, the counteraction provisions in those sections could potentially apply, allowing HMRC to adjust the individual's tax position to remove that advantage.

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