Section 946: Rules for determining “L”
2810.This section supplements section 945 of this Act. It is based on section 344(6), (8), (9), (11) and (12) of ICTA.
2811.This section recasts section 344(9) of ICTA to remove the curious expression “a liability representing the predecessor’s share capital, share premium account, reserves or relevant loan stock”.
2812.In subsection (6)(a), the expression “issued or otherwise originated” is broad enough to cover a transfer to reserves.
2813.The wording of section 344(9) of ICTA is broad enough to cover a series of conversions of capital. Subsection (6)(a) makes this point explicit. In practice, however, such a series would be unlikely to meet the temporal condition imposed by subsection (6)(b).
2814.In section 344(11) of ICTA, the words “(whether secured or unsecured)” block the argument that unsecured loan notes cannot be “relevant loan stock” because if they are not secured they cannot be securities. Subsection (8) therefore retains this parenthesis.
