This chapter deals with disposals of shares. Due to the derivative nature of shares, the tax on corporate income when derived can be duplicated when gains on the disposal of shares are taxed (economic double taxation). The stripping effect of dividends can remove the duplication. These themes inform various options for the taxation of share gains. A major issue here is how taxation of gains on the disposal of shares relates to the taxation of dividends (Chapter 2). There may be similar treatment, but this is not always possible depending on the type of dividend relief adopted. Other methods of integration are possible. Share disposals may cause a change of ownership of a corporation with consequences at the corporate level, particularly on a corporation’s tax attributes such as losses. Many countries restrict the use of corporate carry forward losses on a change of ownership. Defining a sufficient change highlights the artificiality of corporations. Other tax attributes are considered, including the tax value of assets, unrealised losses and the carry forward of credits. The chapter concludes with a comparison of the tax consequences on the sale of a corporate business either directly or indirectly through the sale of shares.

This final chapter considers the reverse of Chapter 7. Here there might be no realisation event with respect to shares, but the shareholder’s interest may be considered to have changed sufficiently in substance to justify tax consequences. This chapter focuses on the interplay between dividend taxation and taxation on the disposal of shares. If those taxations are not similar and capital gains treatment is preferred, taxpayers might attempt to convert dividends into capital gains such as by disposing of the right to receive dividends or disposing of shares cum-dividend. If capital gains treatment is not preferred, there may be an attempt to strip value out of shares before disposal either directly by attacking rights in shares or indirectly by taking value out of a corporation. This is referred to as value shifting. Finally, if different types of shareholders have different preferences, then they might try to arbitrage their tax treatments by combining dividend disposal and capital stripping. This can happen with stock lending and share repurchase agreements but can also be a feature of abusive full dividend stripping.

This chapter deals with taxation when a corporation distributes income. It presumes all events occur within a particular country and that the capital structure of the corporation does not change. Dividends as payments with respect to corporate rights are discussed. Corporate financing in the forms of debt and equity are explored with a consideration of hybrid instruments and thin capitalisation. The discussion proceeds to consider the fundamental features of dividends and hidden profit distributions, which have tax consequences at both the corporate and shareholder levels. The dual nature of corporate income is identified, which involves dividends constituting taxable income. With the taxation of corporate income when derived, the result is economic double taxation, the classical system. Arguments in support of and against this double taxation are considered before the discussion turns to consider the options for relieving the double taxation (dividend relief). Dividend relief options at the corporate level and the shareholder level are explored with a consideration and categorisation of recent international practice. Systems behave differently when faced with expenses in deriving dividends, preference income and dividend streaming. Finally, the manner in which a corporate tax system allocates profits as retained or distributed is considered.

This chapter considers the termination of share interests. This may involve a termination of some of the rights attached to shares and here the tax treatment of returns of capital and capital cancellation are considered. It might also involve termination of shares, but not the corporation itself. Here the discussion considers the tax treatment of share redemptions and share buy backs. Thirdly, shares may be terminated when a corporation is liquidated. Liquidations involve either a solvent or an insolvent corporation. The liquidation of insolvent corporations raises issues regarding whether any losses may be restricted due to a change of control and whether and when the corporation might be considered to leave a corporate group. The liquidation of a solvent corporation involves the return of capital to shareholders as well as a share of retained profits. Liquidation distributions raise the issue of whether the distribution should be treated more like a dividend (Chapter 2) or more like the disposal of shares (Chapter 5) and reconciliation between them. This chapter also contrasts the tax treatment of the various methods of returning value to shareholders whether in the form of dividends, gains on disposal of shares, share buy backs and liquidation distributions.

This chapter deals with taxation when a corporation derives income. It presumes the profits have a domestic source, are retained (no distribution) and that the capital structure of the corporation does not change. The discussion explores the relationship between the identification of corporations under corporate law and the entities that are the subjects of corporate tax systems. Some non-corporate entities are often within the corporate tax system and some corporate entities are not (including check the box). It also considers the subcategorizations of corporations for tax purposes. The structure of the corporate tax base is explored and its relationship with financial accounts. Special rules for corporate groups are considered, with a focus on deferral of intra-group transactions and group loss relief. Consolidation and other options are discussed. Section 1.3 first explores some philosophical approaches that have often been suggested as a basis for corporate taxation. The discussion proceeds more directly to discuss policy options and considerations in selecting a corporate tax rate. Finally, the chapter considers the taxation of shareholders and controllers with respect to retained profits. This is a particular type of tax transparency and is often applied in the context of personal services corporations.

Introduces the book by outlining its approach, which is conceptual and comparative, and its focus, which is on the practical implications of policy options within a corporate tax system. In defining the scope of the book, it engages with the meaning of ‘corporation’ and what aspects of income taxation may be considered to fall within the corporate tax system. In doing so it identifies the importance of the corporate/shareholder relationship and its interface with the nature of corporations. The importance of corporations within the global economy is outlined. The introduction proceeds to explain how the nature of corporations engages with the fundamental features of income taxation. The importance of the use of corporations to structure commercial dealings in different ways is identified, as is the consequence of this for the income tax system. The corporate tax choices that corporations make have serious implications for corporate governance, which forms a background to the book. The legislative framework within which the corporate tax system is positioned is discussed, as is the scope and structure of the book.

This chapter considers the change of an existing share interest in some form. There is a realisation event, either by issuing, transferring or terminating share interests. The change can be by substitution, such as on the exercise of options or convertible notes. It might be by way of splitting and here the focus is on the tax treatment of bonus shares or stock distributions. It can also be by way of consolidation. All of these corporate reconstructions raise the issue of whether the investor’s interest in the corporation has changed sufficiently to justify the imposition of tax consequences. Similar issues arise where more than one corporation is involved in the change. So, in a corporate merger, a shareholder in the target may exchange their shares in return for shares in the bidder. Consideration is given to mergers by fusion and mergers by share exchange. Such mergers raise change of ownership issues (Chapter 5) similar to those raised in the context of a cash takeover. Demergers involve the splitting of a business or subsidiary from the holding corporation, and this can result in the investor holding two sets of shares post demerger. Issues raised are similar to for bonus shares.

This chapter projects Chapters 1 and 2 into an international setting by considering how the corporate tax system behaves when international factors are introduced. It continues to presume the capital structure of the corporation does not change. The focus is on the differing jurisdictions to tax resident versus non-resident corporations, and the chapter is structured around this distinction. Three cross-border options where there is a jurisdiction to tax are identified for each of resident and non-resident corporations. The relationships between these options are considered with a particular emphasis on how the tax outcome differs from a purely domestic setting. With respect to resident corporations, it is noted that corporate-level dividend relief does not work well when foreign income is derived, but shareholder-level systems do. By contrast, shareholder-level dividend relief systems do not work well in the context of outbound dividends, but corporate-level dividend relief systems can (but are restricted by recent international norms). Corporate-level dividend relief does not work at all with respect to non-resident corporations. Here many countries’ corporate tax systems distort the choice of whether a non-resident should create a presence through a branch or subsidiary.

This chapter begins a series of chapters on the tax treatment of dealings in interests in corporations, and particularly shares. Shares may be created, transferred and terminated (holding being dealt with in earlier chapters). This chapter deals with the creation of shares and begins with a discussion of the issue of shares for cash versus the issue of shares for non-business assets. Whatever the form of consideration provided, the assets contributed to a corporation are duplicated or reflected in the value of the shares. Shares as assets deriving their value from corporate assets and activities is a theme of the remainder of the book. With respect to contributions of assets for shares, the primary issue is whether the transfer of assets to the corporation gives rise to the taxation of build in gains for the transferor. Often countries provide relief from this charge (rollover) and in doing so challenge the separate identity of the corporation for tax purposes. The focus of the chapter is on incorporation of a business and the different ways in which countries structure qualification for relief on incorporation.

Introduction

This chapter outlines a conceptual framework for understanding the relationship between male adult youth work professionals characterised, or positioned, as ‘role models’ and young men positioned as ‘roadmen’. It begins with a critique of social policy that promotes male role models for young men in the UK, as it relates to both formal and informal education settings. It then sets out a theoretical perspective on masculine subjectivities using positioning and psychosocial theory and highlights some implications for our understanding of relationships between male youth professionals and young men. Using a closely observed case study of a young Black man and his older White male youth worker, this chapter argues that male youth workers seeking to proffer alternative ‘roads’ for younger men need to develop a deep, reflexive awareness of their own and young men's identity constructions. The chapter concludes that social policy making and professional training regimes may need to be more acutely attuned to the complexity of these professional relationships.

Role models and roadmen: policy and positioning

Role models

Considerable political capital has been spent, both in the United States and the United Kingdom, on ‘solving’ the problem of youth crime and violence via the promotion of appropriate ‘role models’ and ‘mentors’ for ‘alienated’, and especially Black, young men. Politicians from both of the main British political parties have promoted this common-sense notion despite that it seems to consist of a set of assumptions that have come to be accepted ‘on the basis of limited evidence and challenge’ (Robb, 2014: 238). Drawing on classic social learning theory (Bandura, 1977) and/or sociological, dramaturgical formulations of identity performance (Goffman, 1959), young people are understood as potentially being redirected along new, non-deviant pathways or ‘roads’ when these are set out or ‘shown’ by an older role model/mentor. This is assumed to occur through a process of imitation and eventual inhabitation of preconceived social roles, which are usually presented as more respectable, law-abiding and successful. Arguably, though, it remains unclear what the precise meaning and function of these male role models might be, and how the process of modelling and behavioural change occurs on the ground in face-to-face youth work practice.