Beare on Consortium Relief - Tax Journal 25/4/14

Question 0

The provision in the consortium relief rules which permits the suspension of a member’s voting rights on, or as a result of, certain contingencies is limited in what way?

Answer 0

It does not extend to permitting the suspension of the voting rights of the board members that have been nominated by that member.

Question 1

ESC C10, which contained exceptions to the consortium relief anti-avoidance provisions, has now been codified in what legislation?

Answer 1

CTA 2010 ss155A-155B, 174A and 174B.

Question 2

Does a shareholders’ agreement constitute a constitutional document for the purposes of permitted arrangements which are permitted under the anti-avoidance provisions in the consortium relief rules?

Answer 2

Arguably not as it stands outside the memorandum and articles of association of a company, although there seems to be no obvious policy reason for this.

Question 3

The legislation that replaces ESC C10 includes an exception from the consortium relief ant-avoidance provisions for transfers of shares or securities to one or more members of a joint venture on or as a result of one or more specified contingencies, but what does this exception not cover?

Answer 3

Issues of shares or securities in the joint venture company in that context.