http://www.legislation.gov.uk/ukpga/1986/41/section/97Finance Act 1986An Act to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with Finance.1986-07-25texttext/xmlenStatute Law Database2026-04-29Expert Participation2026-04-01 Part IV971Where securities are transferred —ato a company which at the time of the transfer falls within subsection (6) of section 70 above . . . , andbfrom a company which at that time falls within that subsection . . . , ... there shall be no charge to tax under section 96 above in respect of the transfer2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3There shall be no charge to tax under section 96 above in respect of a transfer ... of a UK bearer instrument, except in the case of—aan instrument within the exemption conferred by paragraph 16 of Schedule 15 to the Finance Act 1999 (renounceable letters of allotment etc. where rights are renounceable not later than six months after issue), orban instrument within the exemption conferred by paragraph 17 of that Schedule (non-sterling instruments) which—idoes not raise new capital, andiiis not issued in exchange for an instrument raising new capital.3AFor the purpose of subsection (3)(b)—aan instrument is regarded as raising new capital only if the condition in subsection (3B) is met, andban instrument is regarded as issued in exchange for an instrument raising new capital only if the conditions in subsection (3C) are met.3BThe condition mentioned in subsection (3A)(a) is that the instrument—ais issued in conjunction with—ithe issue of relevant securities for which only cash is subscribed, oriithe granting of rights to subscribe for relevant securities which are granted for a cash consideration only and exercisable only by means of a cash subscription; orbis issued to give effect to the exercise of such rights as are mentioned in paragraph (a)(ii).3CThe conditions mentioned in subsection (3A)(b) are that—athe instrument is issued in conjunction with the issue of relevant securities by a company in exchange for relevant securities issued by another company, andbimmediately before the exchange an instrument relating to those other securities—iwas regarded for the purposes of subsection (3)(b) as raising new capital or as issued in exchange for an instrument raising new capital, oriiwould have been so regarded if the amendments made to this section by section 117 of the Finance Act 1999 had been in force at the time of its issue,and accordingly was or would have been within the exception conferred by subsection (3).3DFor the purposes of subsections (3B) and (3C) “relevant securities” means chargeable securities which are either—ashares the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the company, orbloan capital within the meaning of section 78 above,and which, in either case, do not carry any rights (of conversion or otherwise) by the exercise of which chargeable securities other than relevant securities may be obtained.4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7Where an arrangement is entered into under which—aa company issues securities to persons in respect of their holdings of securities issued by another company, andbthe securities issued by the other company are cancelled,the issue shall be treated for the purposes of this section as an issue of securities in exchange for securities issued by the other company.Words in s. 97(1) repealed (with effect in as mentioned in s. 134(5) of the amending Act) by Finance Act 2000 (c. 17), s. 134(3), 156, Sch. 40 Pt. IIIS. 97(2) repealed (with effect as mentioned in s. 196(4) of the amending Act) by Finance Act 1996 (c. 8), s. 205, Sch. 41 Pt. VIIS. 95(3) substituted (with application as mentioned in s. 113(4) of the amending Act) by Finance Act 1999 (c. 16), s. 113(3),{Sch. 16 para. 8} (with s. 123(4))S. 97(7) substituted (with application as mentioned in s. 117(7) of the amending Act) by Finance Act 1999 (c. 16), s. 117(4) (with s. 123(4))Pt. 4: construed as one with 1999 c. 16, Pt. VI (27.7.1999) by Finance Act 1999 (c. 16), s. 123(1)Pt. 4: power to restrict conferred (27.7.1999) by Finance Act 1999 (c. 16), s. 119 (with s. 123(4))Pt. 4: power to extend conferred (1.5.1995) by Finance Act 1995 (c. 4), s. 152(2)(b)(6)Pt. 4: 2019 c. 1, s. 48 construed as one with this Part (with effect in accordance with s. 48(12) of the amending Act) by Finance Act 2019 (c. 1), s. 48(11)Pt. 4: 2019 c. 1, s. 48A construed as one with this Part by 2019 c. 1, s. 48A(9) (as inserted (22.7.2020) by Finance Act 2020 (c. 14), s. 78)S. 96 cross-heading inserted (with effect in accordance with Sch. 11 para. 25 of the amending Act) by Finance Act 2024 (c. 3), Sch. 11 para. 11(1) (with Sch. 11 para. 27)Words in s. 97(1) omitted (with effect in accordance with Sch. 11 para. 25 of the amending Act) by virtue of Finance Act 2024 (c. 3), Sch. 11 para. 12(2)Words in s. 97(3) omitted (with effect in accordance with Sch. 11 para. 25 of the amending Act) by virtue of Finance Act 2024 (c. 3), Sch. 11 para. 12(3)S. 97(4)-(6) omitted (with effect in accordance with Sch. 11 para. 25 of the amending Act) by virtue of Finance Act 2024 (c. 3), Sch. 11 para. 12(4)