[138A Use of earn-out rights for exchange of securities]
Taxation of Chargeable Gains Act 1992 (1992 c 12) | Legislation

[138A  Use of earn-out rights for exchange of securities]

[(1)     For the purposes of this section an earn-out right is so much of any right conferred on any person (“the seller”) as—

(a)     constitutes the whole or any part of the consideration for the transfer by him of shares in or debentures of a company (“the old securities”);

(b)     consists in a right to be issued with shares in or debentures of another company (“the new company”);

(c)     is such that the value or quantity of the shares or debentures to be issued in pursuance of the right (“the new securities”) is unascertainable at the time when the right is conferred; and

(d)     is not capable of being discharged in accordance with its terms otherwise than by the issue of the new securities.

(2)     Where—

(a)     there is an earn-out right, [and]

(b)     the exchange of the old securities for the earn-out right is an exchange to which section 135 would apply, in a manner unaffected by section 137, if the earn-out right were an ascertainable amount of shares in or debentures of the new company, . . .

(c)     . . .

this Act shall have effect, in the case

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