Companies Act 2014 section 76

Treatment of premiums paid on shares issued before a certain date

Section 76 deals with how share premiums on shares issued before 1 April 1964 are to be treated for the purposes of the share premium account rules.

• Share premium rules under section 71(5) apply retrospectively to shares issued at a premium before 1 April 1964, as if those shares had been issued after that date.
• The exceptions to the share premium account requirements set out in sections 72 to 75 (covering mergers and acquisitions of shares) also apply to these pre-1964 share issues.
• Where any part of a pre-1964 share premium had already been applied under the old 1963 Act rules and no longer formed an identifiable part of the company's reserves by 1 April 1964, that part is permanently excluded from the share premium account.
• The practical effect is that companies are not required to reconstruct or recapture amounts from pre-1964 premiums that had already been legitimately used before the modern share premium account rules came into force.