Preference shares (UK) meaning

Tax consequences of different buyback structures The table below offers a concise overview of the tax outcomes arising from the various forms of share buyback that a UK company may undertake. Throughout, it is assumed that the relevant shareholder is UK resident and that the repurchased shares are held as an investment. For fuller guidance on the tax treatment of share buybacks, see the following Practice Notes: Tax consequences of share buybacks—main rules Tax consequences of share buybacks—calculating the income capital split Tax consequences of share buybacks—unquoted trading companies For a comparative table setting out other ways a company can return value to shareholders, together with the principal UK tax issues for each route, see: Key UK tax considerations for returning value to shareholders—comparative table. Note that tailored provisions apply where the company repurchasing its shares is a qualifying asset holding company. For more on this, refer to Practice Note: Qualifying asset holding companies (QAHCs)—tax treatment...

Blackrock Holdco 5, LLC v HMRC [2024] EWCA Civ 330 What was the background? In April 2024, the Court of Appeal delivered its decision in the Blackrock appeal. The dispute focused on whether companies could deduct interest under the transfer pricing (TP) rules and the Unallowable Purpose Rule, as set out in sections 441–442 of the Corporation Tax Act 2009. A US-headed group deployed a debt-financed, Delaware-incorporated SPV that was UK tax resident (LLC 5) within the structure for acquiring a US target. LLC 5 took an interest-bearing loan from its US parent (LLC 4) of approximately $4bn to purchase preference shares issued by the acquisition vehicle (LLC 6), which generated non-taxable income. LLC 5 sought to surrender its tax losses, for no consideration, to other UK entities within the BlackRock group as group relief. HMRC contested the interest deductibility under TP, arguing that independent parties acting at arm’s length would not have entered into the loan, and also under the Unallowable Purpose Rule on the basis...

In this issue: Sustainable finance and ESG round-up LIBOR and benchmarks Security Sustainable finance Debt capital markets Securitisation and structured products Regulation for banking lawyers Sanctions Daily and weekly news alerts New and updated content Latest Q&A Useful information Sustainable finance and ESG round-up For a summary of this week’s Sustainable finance and ESG developments, see: Sustainable finance and ESG weekly round-up—17 October 2024. LIBOR and benchmarks Standard Chartered Plc v Guaranty Nominees Ltd and other companies [2024] EWHC 2605 (Comm) Standard Chartered (the Claimant) had issued perpetual preference shares whose dividends referenced the three-month USD LIBOR. Following the cessation of LIBOR publication, prompted by the contraction of the unsecured interbank lending market, the Claimant proposed switching the dividend calculation to a Compound Secured Overnight Financing Rate (SOFR) plus the International Swaps and Derivatives Association (ISDA) Spread Adjustment, but did not secure the requisite 75% approval. The court determined...

BlackRock Holdco 5 LLC v HMRC [2024] EWCA Civ 330 The taxpayer, LLC5, was incorporated in Delaware but resident in the UK, and was established within the BlackRock group’s structure for its 2009 purchase of the Barclays Global Investor business. LLC5 issued a number of tranches of loan notes to its direct parent, LLC4, and claimed non-trading loan relationship debits for interest paid over several years. It also acquired preference shares in LLC6, which then carried out the acquisition. HMRC denied the debits claimed by LLC5 on two bases: the loans were not on terms comparable to those between independent enterprises (the transfer pricing issue); and securing a tax advantage was a main purpose of LLC5 being party to the loan relationship, with the debits attributable to that purpose (the unallowable purpose issue). The First-tier Tax Tribunal (FTT) upheld the taxpayer’s appeal on both issues...

It is fundamental to ensuring the arrangement meets the company’s specific needs and objectives. This Practice Note aims to assist in pinpointing a company’s stated objectives so as to determine the most fitting share scheme arrangement for it. Types of schemes For the purposes of this note, the following categories of share scheme arrangements will be examined and evaluated against each objective: unapproved share option schemes enterprise management incentives (EMI) schemes company share option plans (CSOPs) share incentive plans (SIPs) save as you earn/sharesave (SAYE) schemes long term incentive plans (LTIPs) growth or value share arrangements joint share ownership plans (JSOPs) phantom share plans Company objectives Set out below are questions to help a company identify the most appropriate share incentive arrangement to meet its aims: Should the scheme be extended to all eligible employees, or offered only on a discretionary basis? Is the arrangement intended for employees alone,...

As set out in Scope of distributions for tax purposes, distributions fall into four categories: dividends — covering paragraph A, with fuller guidance in Tax—types of distribution—dividends transfers of assets or liabilities — covering paragraphs B and G, with further detail in Tax—types of distribution—transfers of assets and liabilities interest recharacterised as a distribution — spanning paragraphs E and F, with more detail in Types of distribution—interest recharacterised as a distribution: non-commercial securities and Types of distribution—interest recharacterised as a distribution: special securities bonus issues of shares or securities — covering paragraphs C, D and H and discussed further in this note Paragraphs C and D—Redeemable share capital and securities The third and fourth categories comprise the company issuing any redeemable share capital or any securities: in respect of shares in, or securities of, the company; and otherwise than for new consideration Distributions within paragraph C or D are often termed ‘CD distributions’,...

STOP PRESS Major changes to the UK prospectus framework took effect on 19 January 2026. The updated regime for public offers of securities and for admissions to trading in the UK is contained in the Public Offers and Admissions to Trading Regulations 2024, SI 2024/105 (the POATRs), together with the FCA sourcebook, The Prospectus Rules: Admission to Trading on a Regulated Market (PRM). The UK Prospectus Regulation and the FCA Prospectus Regulation Rules have been revoked. These reforms aim to streamline fundraising and markedly cut the instances when a company must produce an FCA-approved prospectus for a subsequent share issue, and in the UK reduce prospectus requirements accordingly. For comprehensive details of the amendments, see Practice Note: UK prospectus regime reform. This Practice Note records the prospectus regime as it stood before 19 January 2026. It also outlines the cash box structure and the rationale for its deployment in relation to a proposed placing by a public limited company incorporated in the UK, admitted to listing on the Official...

To: [ name of offeror ] (the Company) and its other directors [ name of financial adviser ] (the Bank ) Proposed takeover offer for [ insert name of offeree ] (the Offeree ) I, the undersigned, being a director of the Company, acknowledge that, in relation to the offer [ to be ] made by the Company for [ all ] the issued [ and to be issued ] [ ordinary ] [ and preference ] share capital of the Offeree [ (such offer to be implemented by means of a scheme of arrangement ( Scheme ) of the Company) ] (the [ Offer OR Acquisition ]): [ the Company may issue or publish, or procure the issue or publication of (amongst other things): [ a document sent to shareholders of the Offeree, setting out information regarding the Offer, including complete details of its terms and conditions...

subscription and shareholders’ agreement/investment agreement Insert new definitions: A Ordinary Shares; Board; Chair (per clause reference); Investor Consent/Investor Direction (written consent by the Lead Investor or holders of at least [75]% in nominal value of A Ordinary Shares); Investor Director; [Lead Investor]. Add a clause granting Investors the right at any time to appoint and remove non-executive Investor Director[s] and a non-executive Chair by written notice (first appointments effective on Completion), appoint alternates, disapply retirement by rotation, and secure fees of £[amount] p.a. plus VAT and expenses. Establish post‑Completion [remuneration and audit] committee[s] with casting vote rights. articles of association Add definitions for A and B Ordinary Shares, Preference Shares, Investor, Investor Group, Investor Associate, Investor Director, Investor Consent/Direction, Investor Director Interest, Group Company Interest, Co‑Investment Scheme, Confidential Information, FSMA, Fund, Lead Investor, Recognised Investment Exchange, Quotation and Sale. New articles set Board size; permit alternates; regulate meetings, quorum and remote participation; enable authorisation of conflicts and Investor Director/Group Company interests with disclosure and, if directed, A...

To: [ name of offeree ] (the Company) and its other directors; [ name of financial adviser ] (the Bank) Proposed takeover offer for the Company 1 I, the undersigned, being a director of the Company, acknowledge that, in relation to the offer [ to be ] made by the [ insert name of offeror ] (the Offeror) for [ all ] the issued [ and to be issued ] [ ordinary ] [ and preference ] share capital of the Company [ (such offer to be implemented by means of a scheme of arrangement ( Scheme ) of the Company) ] (the [ Offer OR Acquisition ] ), [ the Offeror will or may issue or publish, or arrange for the issue or publication of (amongst other things): a document addressed to the Company’s shareholders setting out information on the Offer, including complete details of its terms and conditions (the Offer Document); [ a prospectus or an...