Session 2012 - 13
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Finance 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individual is withdrawn if—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found not to have been due must be withdrawn.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may not be withdrawn on the ground—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 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 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 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 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 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 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—

 
 

 
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Revised 9 May 2012