Session 2012 - 13
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Finance Bill


Finance Bill
Schedule 6 — Seed enterprise investment scheme
Part 1 — The scheme

218

 

257DI   

 The gross assets requirement

(1)   

In the case of relevant shares issued by a single company, the value

of the company’s assets must not exceed £200,000 immediately

before the relevant shares are issued.

(2)   

In the case of relevant shares issued by a parent company, the value

5

of the group assets must not exceed £200,000 immediately before the

relevant shares are issued.

(3)   

For the purposes of this section the value of the group assets is the

sum of the values of the gross assets of each of the members of the

group, ignoring any that consist in rights against, or shares in or

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securities of, another member of the group.

257DJ   

 The number of employees requirement

(1)   

If the issuing company is a single company, the full-time equivalent

employee number for it must be less than 25 when the relevant

shares are issued.

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(2)   

If the issuing company is a parent company, the sum of—

(a)   

the full-time equivalent employee number for it, and

(b)   

the full-time equivalent employee numbers for each of its

qualifying subsidiaries,

   

must be less than 25 when the relevant shares are issued.

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(3)   

The full-time equivalent employee number for a company is

calculated as follows—

Step 1

Find the number of full-time employees of the company.

Step 2

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Add, for each employee of the company who is not a full-time

employee, such fraction as is just and reasonable.

The result is the full-time equivalent employee number.

(4)   

In this section references to an employee—

(a)   

include a director, but

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(b)   

do not include—

(i)   

an employee on maternity or paternity leave, or

(ii)   

a student on vocational training.

257DK   

 No previous other risk capital scheme investments

(1)   

The requirement of this section is that—

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(a)   

no EIS investment or VCT investment is or has been made in

the issuing company on or before the day on which the

relevant shares are issued, and

(b)   

no EIS investment or VCT investment has been made on or

before that day in a company which at the time the relevant

40

shares are issued is a qualifying subsidiary of the issuing

company.

(2)   

An “EIS investment” is made in the company if the company—

(a)   

issues shares (money having been subscribed for them), and

 
 

Finance Bill
Schedule 6 — Seed enterprise investment scheme
Part 1 — The scheme

219

 

(b)   

(at any time) provides a compliance statement under section

205 in respect of the shares;

   

and the EIS investment is regarded as made when the shares are

issued.

(3)   

A “VCT investment” is made in the company if an investment (of any

5

kind) in the company is made by a VCT.

257DL   

 The amount raised through the SEIS

(1)   

The sum of the following amounts must not exceed £150,000—

(a)   

the amount of the SEIS investment made in the issuing

company which includes the relevant shares (“the current

10

investment”),

(b)   

the amount of other SEIS investments made in the issuing

company on the same day as the current investment,

(c)   

the amount of any SEIS investments made in the issuing

company during the period of 3 years ending immediately

15

before that day, and

(d)   

the total of any other aid which—

(i)   

is granted to the issuing company on the day the

current investment is made or during that period, and

(ii)   

disregarding any SEIS investment within paragraph

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(a) or (b), would be de minimis aid.

(2)   

An “SEIS investment” is made in a company if—

(a)   

the company issues shares (money having been subscribed

for them), and

(b)   

(at any time) the company provides a compliance statement

25

under section 257ED in respect of the shares;

   

and an SEIS investment is made on the day when the shares are

issued, and the amount of the investment is the amount subscribed

for the shares.

(3)   

“De minimis aid” means de minimis aid within the meaning of

30

Article 2 of Commission Regulation (EC) No 1998/2006 (de minimis

aid).

   

The amount of the aid is the amount of the grant, or if the aid is not

in the form of a grant, the gross grant equivalent amount (within the

meaning of that Regulation).

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(4)   

Subsection (5) applies where, in relation to the current investment—

(a)   

the sum of the amounts mentioned in subsection (1) exceeds

£150,000, but

(b)   

the sum of the amounts in paragraphs (c) and (d) of that

subsection does not exceed £150,000.

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(5)   

In the case of the current investment and each other SEIS investment

made in the issuing company on the same day (if any)—

(a)   

the appropriate proportion of the shares in the issue

constituting the investment and the remainder are to be

treated as two separate issues for the purposes of this Part,

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and

(b)   

the requirement in subsection (1) is to be treated as met in

respect of the issue comprised of the appropriate proportion

 
 

Finance Bill
Schedule 6 — Seed enterprise investment scheme
Part 1 — The scheme

220

 

of the shares in the issue, but not in respect of the issue

comprised of the remaining shares.

(6)   

“The appropriate proportion” of the shares is—

A − B

C

   

where—

   

A is £150,000,

5

   

B is the sum of the amounts in paragraphs (c) and (d) of

subsection (1), and

   

C is the sum of the amounts in paragraphs (a) and (b) of that

subsection.

257DM   

 The qualifying subsidiaries requirement

10

   

Any subsidiary that the issuing company has at any time in period B

must be a qualifying subsidiary of the company.

257DN   

 The property managing subsidiaries requirement

(1)   

Any property managing subsidiary that the issuing company has at

any time in period B must be a qualifying 90% subsidiary of the

15

company.

(2)   

“Property managing subsidiary” means a subsidiary of the company

whose business consists wholly or mainly in the holding or

managing of land or any property deriving its value from land.

(3)   

In subsection (2) references to property deriving its value from land

20

include—

(a)   

any shareholding in a company deriving its value directly or

indirectly from land,

(b)   

any interest in settled property deriving its value directly or

indirectly from land, and

25

(c)   

any option, consent or embargo affecting the disposition of

land.

Chapter 5

Attribution and claims for SEIS relief

Attribution

30

257E    

Attribution of SEIS relief to shares

(1)   

References in this Part, in relation to any individual, to the SEIS relief

attributable to any shares or issue of shares are to be read as

references to any reduction made in the individual’s liability to

income tax that is attributed to those shares or that issue in

35

accordance with this section.

   

This is subject to the provisions of Chapters 6 and 7 providing for the

withdrawal or reduction of SEIS relief.

(2)   

If an individual’s liability to income tax is reduced in any tax year,

then—

40

 
 

Finance Bill
Schedule 6 — Seed enterprise investment scheme
Part 1 — The scheme

221

 

(a)   

if the reduction is obtained because of one issue of shares, the

amount of the tax reduction is attributed to that issue, and

(b)   

if the reduction is obtained because of two or more issues of

shares, the amount of the reduction—

(i)   

is apportioned between those issues in the same

5

proportions as the amounts claimed by the individual

in respect of each issue, and

(ii)   

is attributed to those issues accordingly.

(3)   

If under this section an amount of any reduction of income tax is

attributed to an issue of shares (“the original issue”), a proportionate

10

part of that amount is attributed to each share in respect of which the

claim is made.

(4)   

If corresponding bonus shares are issued to the individual in respect

of any shares (“the original shares”) to which SEIS relief is

attributed—

15

(a)   

a proportionate part of the total amount attributed to the

original shares immediately before the bonus shares are

issued is attributed to each of the shares in the holding

comprising the original shares and the bonus shares, and

(b)   

after the issue of the bonus shares, this Part applies as if the

20

original issue had included those shares.

(5)   

In subsection (4) “corresponding bonus shares” means bonus shares

which are in the same company, of the same class, and carry the same

rights as the original shares.

(6)   

If section 257AB(1) and (2) applies in the case of any issue of shares

25

as if part of the issue had been issued in a previous tax year, this

section has effect as if that part and the remainder were separate

issues of shares (and that part had been issued on a day in the

previous tax year).

(7)   

If, at a time when SEIS relief is attributable to, or to any part of, any

30

issue of shares, the relief falls to be withdrawn or reduced under

Chapters 6 and 7—

(a)   

if it falls to be withdrawn, the relief attributable to each of the

shares in question is reduced to nil, and

(b)   

if it falls to be reduced by any amount, the relief attributable

35

to each of the shares in question is reduced by a

proportionate part of that amount.

Claims: general

257EA   

 Time for making claims for SEIS relief

(1)   

A claim for SEIS relief in respect of shares issued by a company in

40

any tax year may not be made later than the fifth anniversary of the

normal self-assessment filing date for the tax year.

(2)   

If section 257AB(1) and (2) applies in the case of any issue of shares

as if part of the issue had been issued in a previous tax year, this

section has effect as if that part and the remainder were separate

45

issues of shares (and that part had been issued on a day in the

previous tax year).

 
 

 
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Revised 9 May 2012