ANNEX 1:: MINOR CHANGES IN THE LAW MADE BY THE BILL Restricted claims on a single issue of shares
There is no indication that other provisions of ICTA contemplate restricted claims.
In fact other provisions, such as section 289B(2)(b) of ICTA (attribution of relief to shares) appear to assume that restricted claims cannot be made. That is because the attribution of relief by section 289B(2)(b) between issues of shares on which relief is claimed is based on:
“the amounts subscribed by the individual for each issue.”
This attribution under section 289B(2)(b) of ICTA would give arbitrary results if a restricted claim were possible. It would be illogical to attribute relief between issues of shares on the basis of 100% of the claimant’s subscriptions for each issue while calculating the relief itself by reference to different percentages of each subscription.
Also, under section 289B(3)(a), where an amount of any reduction of income tax is attributed to an issue of shares, (“the original issue”):
“(a)a proportionate part of that amount shall be attributed to each share comprised in the original issue”
So if for example there is a subscription for shares of £500,000 in 2006-07 which exceeds the maximum of £400,000 for which relief can be obtained and there is a disposal of £100,000 of this holding, the relief attributed to the shares disposed of will be one fifth of the relief obtained.
Whatever the position in ICTA there are good reasons for allowing restricted claims. There could be cases where an individual might reasonably wish to restrict such a claim (perhaps to ensure that the benefit of personal allowances is secured or to obtain the most favourable tax treatment for a part disposal of shares).
The references in section 158(1) of this Act to:
“all or some of the shares included in the issue”
permit a restricted claim.