Part 5 Group relief

Chapter 6 Equity holders and profits or assets available for distribution

Company's entitlement to profits or assets available for distribution: supplementary

170 Shares or securities with limited rights
(1) This section applies if, at the relevant time, one or more of the participating equity holders holds, as such, shares or securities with distribution rights that are limited (wholly or partly) by reference to a specified amount or amounts.
(2) Determine what company A's proportion would be if all those distribution rights were waived so far as they are so limited.
The result is referred to as “the alternative proportion”.
(3) If the alternative proportion is less than what company A's proportion would be ignoring this section, then company A's proportion is taken to be the alternative proportion.
(4) Subsection (3) is subject to sections 175, 176, 178 and 180.
(5) For the purposes of subsection (1) a limitation on a right may operate—
(a) by specifying the capital or amount of profits by reference to which a distribution is calculated, or
(b) in any other way.
(6) But in a case to which section 180 applies (see section 179), limitations that are covered by Case 1 in section 179 are ignored for the purposes of subsection (1).

Pt. 5 Ch. 6 applied in part (with effect in accordance with s. 51 of the amending Act) by Finance Act 2022 (c. 3), s. 50(2)(3)
Pt. 5 Ch. 6 applied (temp.) (with effect in accordance with Sch. 10 para. 43 of the amending Act) by Finance Act 2022 (c. 3), Sch. 10 para. 6(2) (as amended (5.1.2023) by The Finance Act 2022, Schedule 10 (Public Interest Business Protection Tax) (Substitution of Date) Regulations 2022 (S.I. 2022/1321), regs. 1, 2(2))
Pt. 5 applied (with modifications) (24.2.2022) by Finance Act 2022 (c. 3), Sch. 2 para. 47(4)
Ss. 169-178 applied (with modifications) (24.2.2022) by Finance Act 2022 (c. 3), Sch. 2 para. 5(4) (as amended (11.7.2023) by Finance (No. 2) Act 2023 (c. 30), Sch. 4 para. 10)
S. 170(3) applied (with modifications) (temp.) (with effect in accordance with Sch. 10 para. 43 of the amending Act) by Finance Act 2022 (c. 3), Sch. 10 para. 6(3)(a) (as amended (5.1.2023) by The Finance Act 2022, Schedule 10 (Public Interest Business Protection Tax) (Substitution of Date) Regulations 2022 (S.I. 2022/1321), regs. 1, 2(2))