As CG58000 explains, the purpose of TCGA92/S138A is to allow a right to unascertainable deferred consideration that will be satisfied by issuing shares or debentures to be treated as a security, so that the share reorganisation rules can apply.
Conditions for section 138A to have effect
Section 138A(2) sets two conditions that both need to be met before the section 138A treatment can apply.
First, there has to be an ‘earn-out right’ as defined in section 138A(1) – see CG58010.
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