Consortium relief and disqualifying arrangements

There are some serious deficiencies in the present rules in relation to arrangements which preclude the surrender of consortium relief in certain circumstances. The problems have been exacerbated by the enactment of the previous extra-statutory concession, following the decision in Wilkinson. These problems include the absence of a safe harbour for the suspension of directors’ voting rights or for dilutions which take place through an issue of shares, instead of a transfer of shares. Another problem is that the legislation implies that the disqualifying contingencies include circumstances which are both unlikely to occur and undesirable. It is time for these provisions to be re-examined.