Office of Public Sector Information
PART 5 continued CHAPTER 8 continued
(1) Shares subscribed for, issued to, held by or disposed of for an individual by a nominee are treated for the purposes of this Part as subscribed for, issued to, held by or disposed of by the individual.
(2) If shares have been issued to a bare trust for two or more beneficiaries, this Part has effect (with the necessary modifications) as if—
(a) each beneficiary had subscribed as an individual for all of those shares, and
(b) the amount subscribed by each beneficiary was equal to the total amount subscribed on the issue of those shares divided by the number of beneficiaries.
(3) In subsection (2) and section 251 “shares” means shares which meet the requirements of section 173(2).
(1) Subsection (2) applies if an individual claims EIS relief in respect of shares in a company at a time when—
(a) the shares have been issued to the managers of an approved fund as nominee for the individual,
(b) the fund has closed, that is to say, no further investments in the fund are to be accepted, and
(c) the amounts which the managers have, as nominee for the individual, subscribed for shares issued within 6 months after the closing of the fund represent at least 90% of the individual’s investment in the fund.
In this section “the managers of an approved fund” means the person or persons having the management of an investment fund approved for the purposes of this section by the Commissioners for Her Majesty’s Revenue and Customs.
(2) In any case where this subsection applies, section 158 (form and amount of EIS relief) and section 201 (attribution of EIS relief to shares) have effect as if—
(a) any reference to the tax year or other period in which the shares are issued were a reference to the tax year or other period in which the fund closes, and
(b) any reference to the time of the issue of the shares, or the time of the subscription for the shares, were a reference to the time of the closing of the fund.
(3) Section 157(2) (minimum subscription) does not apply if the amount is subscribed as nominee for an individual by the managers of an approved fund.
(4) If an individual claims EIS relief in respect of shares in a company which have been issued to the managers of an approved fund as nominee for the individual, section 203(1) (entitlement to claim) applies as if —
(a) it required the certificate referred to in that section to be issued by the company to the managers, and
(b) it provided that no claim for EIS relief may be made unless the person making the claim has received from the managers a certificate issued by the managers in accordance with subsection (5).
(5) A certificate is issued in accordance with this subsection if—
(a) it certifies that the managers hold compliance certificates issued to them by the companies concerned, for the purposes of section 203(1), in respect of the holding of shares shown on the managers' certificate, and
(b) it is in such form as the Commissioners for Her Majesty’s Revenue and Customs may authorise.
(6) The managers of an approved fund may be required by a notice given to them by an officer of Revenue and Customs to deliver to the officer, within the time limited by the notice, a return of the holdings of shares shown on certificates issued by them in accordance with subsection (5) in the tax year to which the return relates.
(7) Section 207 (penalties for fraudulent certificate or statement etc) does not apply in relation to any certificate issued by the managers of an approved fund for the purposes of subsection (4).
(1) References in this Part to a company being “in administration” or “in receivership” are to be read as follows.
(2) A company is “in administration” if—
(a) it is in administration within the meaning of Schedule B1 to the Insolvency Act 1986 (c. 45) or Schedule B1 to the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)), or
(b) there is in force in relation to it under the law of a country or territory outside the United Kingdom any appointment corresponding to an appointment of an administrator under either of those Schedules.
(3) A company is “in receivership” if there is in force in relation to it—
(a) an order for the appointment of an administrative receiver, a receiver and manager or a receiver under Chapter 1 or 2 of Part 3 of the Insolvency Act 1986 or Part 4 of the Insolvency (Northern Ireland) Order 1989, or
(b) any corresponding order under the law of a country or territory outside the United Kingdom.
(1) In this Part “associate”, in relation to a person, means—
(a) any relative or partner of that person,
(b) the trustee or trustees of any settlement in relation to which that person, or any relative of that person (living or dead), is or was a settlor, and
(c) if that person has an interest in any shares or obligations of a company which are subject to any trust or are part of the estate of a deceased person—
(i) the trustee or trustees of the settlement concerned or, as the case may be, the personal representatives of the deceased, and
(ii) if that person is a company, any other company which has an interest in those shares or obligations.
(2) In subsection (1)(a) and (b) “relative” means spouse or civil partner, ancestor or lineal descendant.
(1) In this Part references to a disposal of shares include references to a disposal of an interest or right in or over shares.
(2) An individual is to be treated, for the purposes of this Part, as disposing of any shares which the individual is treated by virtue of section 136 of TCGA 1992 as exchanging for other shares.
(1) In this Part—
(a) references (however expressed) to an issue of shares in any company are to such of the shares in the company as are of the same class and are issued on the same day, and
(b) references (however expressed) to an issue of shares in any company to an individual are to such of the shares in the company as are of the same class and are issued to the individual on the same day.
(2) Subsection (1)(b) has effect subject to sections 201(6), 202(2), 210(2), 219(1) and 228(1).
(1) In this Part “the termination date”, in relation to any shares issued by a company, means—
(a) the third anniversary of the issue date, or
(b) if—
(i) the money raised by the issue was raised wholly or mainly for the purpose of a qualifying business activity within section 179(2) (the issuing company or a qualifying 90% subsidiary of that company carrying on or preparing to carry on a qualifying trade), and
(ii) neither the issuing company nor any of its qualifying 90% subsidiaries had begun to carry on the trade in question on the issue date,
the third anniversary of the date on which the issuing company or any qualifying 90% subsidiary of that company begins to carry on that trade.
(2) In determining for the purposes of subsection (1) when a qualifying trade is begun to be carried on by a qualifying 90% subsidiary of a company, any carrying on of the trade by it before it became such a subsidiary is to be ignored.
(1) In this Part—
“arrangements” includes any scheme, agreement or understanding, whether or not legally enforceable,
“bonus shares” means shares which are issued otherwise than for payment (whether in cash or otherwise),
“director” is read in accordance with section 417(5) of ICTA,
“group” means a parent company and its qualifying subsidiaries,
“group company”, in relation to a group, means the parent company or any of its qualifying subsidiaries,
“ordinary shares” means shares forming part of a company’s ordinary share capital,
“parent company” means a company that has one or more qualifying subsidiaries and “single company” means a company that does not,
“period A”, “period B” and “period C” have the meaning given by section 159, and
“research and development” has the meaning given by section 1006.
(2) Section 993 (connected persons) does not apply for the purposes of Chapter 2 (other than section 168(4)).
(3) Section 995 (control) does not apply for the purposes of the following provisions—
section 185(1)(a),
section 199(3)(a) and (b)(ii),
section 232(3),
section 233(2), and
section 243(4),
and in those provisions “control” is to be read in accordance with section 416(2) to (6) of ICTA.
(4) In this Part—
(a) references in any provision to the reduction of any EIS relief attributable to any shares include a reference—
(i) to the reduction of the relief to nil, and
(ii) if no relief has yet been obtained, to the reduction of the amount which apart from that provision would be the EIS relief, and
(b) references to the withdrawal of EIS relief in respect of any shares are—
(i) to the withdrawal of the EIS relief attributable to those shares, or
(ii) if no relief has yet been obtained, to ceasing to be eligible for EIS relief in respect of those shares.
(5) For the purposes of this Part shares in a company are not treated as being of the same class unless they would be so treated if dealt in on the Stock Exchange.
(6) For the purposes of this Part the market value at any time of any asset is the price which it might reasonably be expected to fetch on a sale at that time in the open market free from any interest or right which exists by way of security in or over it.
(7) In this Part—
(a) references to EIS relief obtained by an individual in respect of any shares include references to EIS relief obtained by the individual in respect of those shares at any time after the individual has disposed of them, and
(b) references to the withdrawal or reduction of EIS relief obtained by an individual in respect of any shares include references to the withdrawal or reduction of EIS relief obtained by the individual in respect of those shares at any such time.
(8) In the case of requirements that cannot be met until a future date, references in this Part to requirements being met for the time being are to nothing having occurred to prevent their being met.
Income Tax Act 2007