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CTA10/S677 (2) and S688 to S691

For the purposes of CTA10/S677 whether there is a significant increase in the amount of the company's capital is determined in accordance with S688 to S691.

The test involves a comparison of:

Amount A (CTA10/S689 (1)), which is the lower of

• the amount of the company’s capital immediately before the change of ownership, and
• the highest amount over a 60 day minimum period for the year before the change,

with

Amount B (CTA10/S690), which is the highest amount for a 60-day minimum period in the five (formerly three) years beginning with the change in ownership.  See F(2)A17/SCH4/PARA83.

For changes in company ownership occurring on or after 1 April 2014, there is a 'significant increase' in the amount of the company's share capital if

• Amount B exceeds Amount A by £1 million or more, and
• Amount B is at least 125 per cent of Amount A

For any changes happening before 1 April 2014, there is a significant increase in the amount of the company’s share capital if

• Amount B exceeds Amount A by £1 million or more, or
• Amount B is at least twice Amount A.

For these purposes a company's capital is the aggregate of:

• the amount of the paid-up share capital, including any share premium,
• the outstanding amount of any debts as defined in CTA10/S453 (meaning ol 'loan creditor') including any interest on those debts, and
• the amount of any redeemable loan capital.

Capital is to be expressed in sterling and rounded up to the nearest pound.

Any conversion into sterling should be at the rate prevailing at the time the capital was introduced or, in the case of debt, when it was incurred.  Capital is always to be included at its sterling historic cost.  Changes in the value of sterling will not therefore affect the calculation of the increase in capital.