Taxation of Chargeable Gains Act 1992 Schedule 7AC paragraph 30

Meaning of "asset related to shares"

Section 30 defines what it means for an asset to be "related to shares" in a company, covering options, convertible securities, and layered interests or options over those instruments.

• An asset is related to shares if it is an option to buy or sell shares (or an interest in shares) in the company, or a security carrying rights to acquire or dispose of such shares through conversion, exchange or otherwise.
• The definition extends to options over such convertible securities, and further to any interest in or option over any of these instruments, including layered interests and options upon options.
• When deciding whether a security qualifies as a convertible or exchangeable security, only rights relating directly or indirectly to shares in the relevant company are considered, and rights that had no more than a negligible likelihood of being exercised to a significant extent when the security was created are ignored.
• The meaning of an "interest" in a security or option follows the same approach as the meaning of an "interest in shares" set out in paragraph 29.