Finance (No. 4) Bill

Session 2010 - 12
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Other Bills before Parliament

Finance (No. 4) Bill

Finance (No. 4) Bill
Schedule 6 — Seed enterprise investment scheme
Part 1 — The scheme
236

(a)
to whom an interest amounting in total to more than a half
share in the trade (as previously carried on) belonged at any
time in period A, and
(b)
who is a person or group of persons to whom such an interest
in the trade carried on by the company belongs or has, at any
5
such time, belonged.
(3)
This subsection applies to any person or group of persons who—
(a)
controls or, at any time in period A, has controlled the
company, and
(b)
at any such time, controlled another company which
10
previously carried on the trade.
(4)
For the purposes of subsection (2)—
(a)
for the purposes of determining the person to whom a trade
belongs and, if a trade belongs to two or more persons, their
respective shares in that trade—
15
(i)
apply section 941(6) of CTA 2010, and
(ii)
an interest in a trade belonging to a company may be
treated in accordance with any of the options set out
in section 942 of that Act, and
(b)
any interest, rights or powers of a person who is an associate
20
of another person are treated as those of that other person.
(5)
In this section “trade” includes any business or profession, and
references to a trade previously carried on include references to part
of such a trade.
257FQ
Acquisition of share capital
25
(1)
Any SEIS relief attributable to any shares in a company held by an
individual is withdrawn if—
(a)
the company comes to acquire all of the issued share capital
of another company at any time in period A, and
(b)
the individual is a person, or one of a group of persons, to
30
whom subsection (2) applies.
(2)
This subsection applies to any person or group of persons who—
(a)
controls or, at any time in period A, has controlled the
company, and
(b)
at any such time, controlled the other company.
35
257FR
Relief subsequently found not to have been due
(1)
Any SEIS relief obtained by the investor which is subsequently
found not to have been due must be withdrawn.
(2)
SEIS relief obtained by the investor in respect of the relevant shares
may not be withdrawn on the ground—
40
(a)
that the requirements of sections 257CB and 257CC (the
purpose of the issue and use of money raised requirements)
are not met in respect of the shares, or
(b)
that the issuing company is not a qualifying company in
relation to the shares (see Chapter 4),
45

unless the requirements of subsection (3) are met.

Finance (No. 4) Bill
Schedule 6 — Seed enterprise investment scheme
Part 1 — The scheme
237

(3)
The requirements of this subsection are met if either—
(a)
the issuing company has given notice under section 257GF
(information to be provided by issuing company etc) in
relation to the relevant issue of shares, or
(b)
an officer of Revenue and Customs has given notice to that
5
company stating the officer’s opinion that, because of the
ground in question, the whole or any part of the SEIS relief
obtained by any individual in respect of shares included in
the relevant issue of shares was not due.
(4)
In this section “the relevant issue of shares” means the issue of shares
10
in the issuing company which includes the relevant shares.
Chapter 7
Withdrawal or reduction of SEIS relief: procedure
Assessments and appeals
257G
Assessments for the withdrawal or reduction of SEIS relief
15

If any SEIS relief which has been obtained falls to be withdrawn or
reduced under Chapter 6, it must be withdrawn or reduced by the
making of an assessment to income tax for the tax year for which the
relief was obtained.
257GA
Appeals against section 257FR(3)(b) notices
20

For the purposes of the provisions of TMA 1970 relating to appeals,
the giving of notice by an officer of Revenue and Customs under
section 257FR(3)(b) is taken to be a decision disallowing a claim by
the issuing company.
257GB
Time limits for assessments
25
(1)
An officer of Revenue and Customs may—
(a)
make an assessment for withdrawing or reducing the SEIS
relief attributable to any of the relevant shares, or
(b)
give a notice under section 257FR(3),

at any time not more than 6 years after the end of the relevant tax
30
year.
(2)
In subsection (1) “the relevant tax year” means—
(a)
the tax year in which period B ends, or
(b)
the tax year in which the event which causes the SEIS relief to
be withdrawn or reduced occurs,
35

whichever is the later.
(3)
Subsection (1) is without prejudice to section 36(1A) of TMA 1970
(loss of tax brought about deliberately etc).
257GC
Cases where assessments not to be made
(1)
No assessment for withdrawing or reducing SEIS relief in respect of
40
shares issued to an individual may be made because of an event
occurring after the individual’s death.

Finance (No. 4) Bill
Schedule 6 — Seed enterprise investment scheme
Part 1 — The scheme
238

(2)
Subsection (3) applies if an individual has, by a disposal or disposals
to which section 257FA(3) applies, disposed of all shares which—
(a)
have been issued to the individual by the issuing company,
and
(b)
are shares—
5
(i)
to which SEIS relief is attributable, or
(ii)
in relation to which period A has not come to an end.
(3)
No assessment for withdrawing or reducing SEIS relief in respect of
those shares may be made because of any subsequent event unless
the event occurs at a time when the individual—
10
(a)
has a substantial interest in the company within the meaning
of section 257BB,
(b)
is an employee of the issuing company, or
(c)
is a director of the issuing company.
Interest
15
257GD
Date from which interest is chargeable
(1)
In its application to an assessment made by virtue of section 257G in
the case of relief withdrawn or reduced by virtue of a provision listed
in subsection (2), section 86 of TMA 1970 (interest on overdue income
tax) has effect as if the relevant date were 31 January next following
20
the tax year in which the assessment is made.
(2)
The provisions are—
(a)
section 257BB (no substantial interest in the issuing
company),
(b)
section 257BD (no linked loan requirement),
25
(c)
sections 257DA to 257DN (Chapter 4 requirements),
(d)
section 257FA (disposal of shares),
(e)
section 257FD (put options),
(f)
section 257FE (receipt of value by the investor),
(g)
section 257FP (acquisition of a trade or trading asset),
30
(h)
section 257FQ (acquisition of share capital).
Information
257GE
Information to be provided by the investor
(1)
This section applies if the investor has obtained SEIS relief in respect
of the relevant shares, and an event occurs as a result of which—
35
(a)
the investor is not a qualifying investor in relation to the
shares,
(b)
the SEIS relief falls to be withdrawn or reduced by virtue of
section 257BD (no linked loans requirement),
(c)
the SEIS relief falls to be withdrawn or reduced under—
40
(i)
section 257FA (disposal of shares),
(ii)
section 257FC (call options), or
(iii)
section 257FD (put options), or

Finance (No. 4) Bill
Schedule 6 — Seed enterprise investment scheme
Part 1 — The scheme
239

(d)
the SEIS relief falls to be withdrawn or reduced under section
257FE (receipt of value by the investor), or would fall to be so
withdrawn or reduced but for section 257FN (receipt of
replacement value).
(2)
The investor must within 60 days of coming to know of the event
5
give a notice to an officer of Revenue and Customs containing
particulars of the event.
(3)
If the investor—
(a)
is required under this section to give notice of a receipt of
value which is within section 257FE, or would be within that
10
section but for section 257FN, and
(b)
has knowledge of any replacement value received (or
expected to be received) because of a qualifying receipt,

the notice must include particulars of that receipt of replacement
value (or expected receipt).
15
(4)
In subsection (3) “qualifying receipt” and “replacement value” are to
be read in accordance with section 257FN.
257GF
Information to be provided by the issuing company etc
(1)
This section applies if the issuing company has provided an officer
of Revenue and Customs with a compliance statement in respect of
20
an issue of shares and an event occurs as a result of which—
(a)
the requirement of section 257CC (spending of the money
raised) is not met in respect of any of the shares included in
the issue, or would not be met if SEIS relief had been obtained
in respect of the shares in question,
25
(b)
any provision of Chapter 4 has effect to prevent the issuing
company being a qualifying company in relation to any of the
shares included in the issue, or would have such an effect if
SEIS relief had been obtained in respect of the shares in
question, or
30
(c)
any of the provisions of Chapter 6 mentioned in subsection
(2) has effect to cause any SEIS relief attributable to any of the
shares included in the issue to be withdrawn or reduced, or—
(i)
would have such an effect if SEIS relief had been
obtained in respect of the shares in question, or
35
(ii)
in the case of section 257FE, would have such an effect
but for section 257FN (receipt of replacement value).
(2)
The provision are—
(a)
section 257FE (value received by the investor),
(b)
section 257FP (acquisition of a trade or trading asset), and
40
(c)
section 257FQ (acquisition of share capital).
(3)
If this section applies—
(a)
the issuing company, and
(b)
any person connected with the issuing company who has
knowledge of the matters mentioned in subsection (1),
45

must give a notice to an officer of Revenue and Customs containing
particulars of the event.

Finance (No. 4) Bill
Schedule 6 — Seed enterprise investment scheme
Part 1 — The scheme
240

(4)
Any notice required to be given by the issuing company under
subsection (3)(a) must be given—
(a)
within 60 days of the event, or
(b)
if the event is a receipt of value within section 257FH(2) from
a person connected with the company (see section 257FM),
5
within 60 days of the company coming to know of the event.
(5)
Any notice required to be given by a person under subsection (3)(b)
must be given within 60 days of the person coming to know of the
event.
(6)
If a person—
10
(a)
is required under this section to give notice of a receipt of
value which is within section 257FE, or would be within that
section but for section 257FN, and
(b)
has knowledge of any replacement value received (or
expected to be received) because of a qualifying receipt,
15

the notice must include particulars of that receipt of replacement
value (or expected receipt).
(7)
In subsection (6) “qualifying receipt” and “replacement value” are to
be read in accordance with section 257FN.
257GG
Power to require information where section 257GE or 257GF applies
20
or could have applied
(1)
This section applies if an officer of Revenue and Customs has reason
to believe that a person—
(a)
has not given a notice which the person is required to give
under section 257GE or 257GF in respect of any event, or
25
(b)
has given or received value within the meaning of section
257FH(2) or (8) which, but for the fact that the amount given
or received was an amount of insignificant value, would have
triggered a requirement to give such a notice.
(2)
The officer may by notice require the person concerned to supply the
30
officer, within such time as the officer may specify in the notice, with
such information relating to the event as the officer may reasonably
require for the purposes of this Part.
(3)
The period specified in a notice under subsection (2) must be at least
60 days.
35
(4)
In subsection (1)(b), the reference to an amount of insignificant value
is construed in accordance with section 257FG(2).
257GH
Power to require information in other cases
(1)
Subsection (2) applies if SEIS relief is claimed in respect of shares in
a company, and an officer of Revenue and Customs has reason to
40
believe that it may not be due because of any such arrangements or
scheme as is mentioned in—
(a)
section 257BC (no related investment arrangements),
(b)
section 257BE or 257DB(2) or (4) (no tax avoidance),
(c)
section 257CD(1) (no pre-arranged exits),
45
(d)
section 257CF (no disqualifying arrangements),

Finance (No. 4) Bill
Schedule 6 — Seed enterprise investment scheme
Part 1 — The scheme
241

(e)
section 257DB(4) (winding up, administration etc), or
(f)
section 257DG(1) or (2) (conditions ceasing to be met).
(2)
The officer may by notice require any person concerned to supply
the officer within such time as may be specified in the notice with—
(a)
a declaration in writing stating whether or not, according to
5
the information which that person has or can reasonably
obtain, any such arrangement or scheme exists or has existed,
and
(b)
such other information as the officer may reasonably require
for the purposes of the provision in question and as that
10
person has or can reasonably obtain.
(3)
The period specified in a notice under subsection (2) must be at least
60 days.
(4)
For the purposes of subsection (2), in a case falling within a provision
listed in column 1 of the following table, the person concerned is
15
given by the corresponding entry in column 2 of the table.

Provision
The person concerned

Subsection (1)(a)
The claimant, the company and any

person controlling the company

Subsection (1)(b)
The claimant

20

Subsection (1)(c)
The claimant, the company and any

person connected with the company

Subsection (1)(d)
The claimant, the company, any

person controlling the company and

any person who an officer of Revenue

25

and Customs has reason to believe

may be a party to the arrangements in

question

Subsection (1)(e)
The claimant, the company, any other

company in question and any person

30

controlling the company or any other

company in question

Subsection (1)(f)
The company and any person

controlling the company


References in this subsection to the claimant include references to
35
any person to whom the claimant appears to have made such a
transfer as is mentioned in section 257H (spouses or civil partners) of
any of the shares in question.
(5)
If SEIS relief has been obtained in respect of shares in a company—
(a)
any person who receives from the company any payment or
40
asset which may constitute value received (by the person or
another) for the purposes of section 257FE, and

Finance (No. 4) Bill
Schedule 6 — Seed enterprise investment scheme
Part 1 — The scheme
242

(b)
any person on whose behalf such a payment or asset is
received,

must, if so required by an officer of Revenue and Customs, state
whether the payment or asset so received is received on behalf of any
other person and, if so, the name and address of that other person.
5
(6)
If SEIS relief has been claimed in respect of shares in a company—
(a)
any person who holds or has held shares in the company, and
(b)
any person on whose behalf any such shares are or were held,

must, if so required by an officer of Revenue and Customs, state
whether the shares so held are or were held on behalf of any other
10
person and, if so, the name and address of that other person.
257GI
Obligations of secrecy

No obligation of secrecy imposed by statute or otherwise prevents an
officer of Revenue and Customs from disclosing to a company that
SEIS relief has been obtained or claimed in respect of a particular
15
number or proportion of its shares.
Chapter 8
Supplementary and general
Disposals of shares
257H
Transfers between spouses or civil partners
20
(1)
This section applies if—
(a)
shares to which an amount of SEIS relief is attributable were
issued to an individual (“A”),
(b)
A transferred the shares to another individual (“B”) during
their lives,
25
(c)
A was married to, or was the civil partner of, B at the time of
the transfer, and
(d)
section 257FA (disposal of shares) does not apply to the
transfer.
(2)
This Part has effect, in relation to any subsequent disposal or other
30
event, as if—
(a)
B were the individual who had subscribed for the shares,
(b)
the amount that B had subscribed for the shares were the
amount that A had subscribed for them,
(c)
B’s liability to income tax had been reduced in respect of the
35
shares for the same tax year as that for which A’s was so
reduced,
(d)
the amount by which B’s liability to income tax had been
reduced in respect of the shares were the same as that by
which A’s liability to income tax had been so reduced, and
40
(e)
that amount of SEIS relief had continued to be attributable to
the shares despite the transfer.
(3)
If the amount of SEIS relief attributable to the shares had been
reduced before the relief was obtained by A—