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Finance Act 2012

Background Note

6.Members of a group or consortium are determined by reference not only to ordinary share capital held, but also to beneficial entitlement to profits available for distribution to equity holders and assets available for distribution to equity holders in a winding up.

7.For these purposes, an equity holder includes ordinary shareholders and loan creditors in relation to loans other than normal commercial loans.

8.Prior to these amendments, loans that carried a right to conversion into the shares or securities of a wholly unconnected listed company would not have fallen within the definition of normal commercial loans; holders of such loans would be treated as equity holders. The amendments will ensure that such loans will be within the definition of normal commercial loans and the holders of the loans will not be treated as equity holders.

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Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.


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