(b) such other information as the officer may reasonably require
for the purposes of the provision in question and as that
person has or can reasonably obtain.

(3) The period specified in a notice under subsection (2) must be at least
560 days.

(4) For the purposes of subsection (2), in the case of a provision listed in
column 1 of the following table, the person concerned is given by the
corresponding entry in column 2 of the table.

25References in the table to the investor include references to any
person to whom the investor appears to have made such a transfer as
is mentioned in section 257T (spouses or civil partners) of the whole
or part of the investment.

(5) If SI relief has been obtained in respect of the investment—

(a) 30any person who receives from the social enterprise any
payment or asset which may constitute value received (by the
person or another) for the purposes of section 257Q, and

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

35must, 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.

(6) If SI relief has been claimed in respect of the investment—

(a) any person who holds or has held investments in the social
40enterprise, and

(b) any person on whose behalf any such investments are or
were held,

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

257SI Confidentiality

(1) 5Section 18(1) of the Commissioners for Revenue and Customs Act
2005 does not prevent an officer of Revenue and Customs from
disclosing to the social enterprise that SI relief has been obtained or
claimed in respect of a particular number or proportion of any
investments in it.

(2) 10Section 18(1) of the Commissioners for Revenue and Customs Act
2005 does not prevent disclosure to the Regulator of Community
Interest Companies for the purposes of the Regulator’s functions.

(3) Information disclosed in reliance on subsection (2) may not be
further disclosed except—

(a) 15with the consent of the Commissioners for Her Majesty’s
Revenue and Customs, or

(b) if the disclosure is required by an enactment.

(4) Information may be disclosed in reliance on subsection (3)(a) only for
the purposes of the Regulator’s functions.

CHAPTER 9 20Miscellaneous and supplementary provisions

257T Transfers between spouses or civil partners

(1) This section applies if—

(a) the investor transfers the whole or part of the investment to
another individual (“B”) during their lives,

(b) 25the investor was married to, or was the civil partner of, B at
the time of the transfer, and

(c) section 257R does not apply to the transfer.

(2) This Part (including subsection (1)) has effect, in relation to any
subsequent disposal or other event, as if—

(a) 30B were the investor as respects the transferred stake,

(b) B’s liability to income tax had been reduced in respect of the
transferred stake for the same tax year as that for which the
investor’s was so reduced,

(c) the amount by which B’s liability to income tax had been
35reduced in respect of the transferred stake were the same as
that by which the investor’s liability had been so reduced,
and

(d) the same amount of SI relief had continued to be attributable
to the transferred stake despite the transfer.

(3) 40If the amount of SI relief attributable to the transferred stake had
been reduced before the relief was obtained by the investor—

(a) this Part has effect, in relation to any subsequent disposal or
other event, as if the amount of SI relief attributable to the

transferred stake had been correspondingly reduced before
the relief was obtained by B, and

(b) section 257QD(2), 257QO(3) and 257RA(4) apply in relation
to B as they would have applied in relation to the investor.

(4) 5If, because of any such disposal or other event, an assessment for
reducing or withdrawing SI relief is to be made, the assessment is to
be made on B.

257TA Identification of investments on a disposal

(1) The rules in subsections (2) and (3) are for determining which
10investments of any class are treated as disposed of for the purposes
of—

(a) section 257R (disposal of the investment), or

(b) section 257T (spouses or civil partners),

if the investor disposes of some but not all of the investments of that
15class which the investor holds in the social enterprise.

(2) Investments made on an earlier day are treated as disposed of before
investments made on a later day.

(3) Investments made on the same day are treated as disposed of in the
following order—

(a) 20first, any to which neither SI relief nor hold-over relief is
attributable,

(b) next, any to which hold-over relief, but not SI relief, is
attributable,

(c) next, any to which SI relief, but not hold-over relief, is
25attributable, and

(d) finally, any to which both SI relief and hold-over relief are
attributable.

(4) Any investments within paragraph (c) or (d) of subsection (3) which
are treated by section 257N(7) as issued on an earlier day are treated
30as disposed of before any other investments falling within that
paragraph of subsection (3).

(5) The following—

(a) any investments to which SI relief is attributable and which
were transferred to an individual as mentioned in section
35257T, and

(b) any investments to which hold-over relief, but not SI relief, is
attributable and which were acquired by an individual on a
disposal to which section 58 of TCGA 1992 applies,

are treated for the purposes of subsections (2) and (3) as acquired by
40the individual on the day on which they were made.

(6) In a case to which section 127 of TCGA 1992 applies (including the
case where that section applies by virtue of an enactment relating to
chargeable gains), shares included in the new holding are treated for
the purposes of subsections (2) and (3) as acquired when the original
45shares were acquired.

(7) In this section—

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• “hold-over relief” means relief under Schedule 8B to TCGA
  1992;

• “new holding” and “original shares” have the same meaning as
  in section 127 of TCGA 1992 (or, as the case may be, that
  5section as applied by the enactment concerned).

257TB Meaning of a company being “in administration” or “in receivership”

(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) 10it is in administration within the meaning of Schedule B1 to
the Insolvency Act 1986 or Schedule B1 to the Insolvency
(Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)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
15corresponding 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
20Part 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.

257TC Meaning of “associate”

(1) 25In this Part “associate”, in relation to a person, means—

(a) any relative or partner of the person,

(b) the trustee or trustees of any settlement in relation to which
the person, or any relative of the person (living or dead), is or
was a settlor, and

(c) 30if the 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
35deceased, and

(ii) if the person is a company, any other company which
has an interest in those shares or obligations.

(2) In this section “relative” means spouse, civil partner, ancestor or
lineal descendant.

257TD 40 Meaning of “control”

(1) In this Part “control” is to be read in accordance with sections 450 and
451 of CTA 2010 but as if “company” in those sections included a
charity that is a trust.

(2) For the purposes of this Part, a charity that is a trust has “control” of
45another person if, as a result of the operation of subsection (1), the
trustees (in their capacity as trustees of the trust) have, or any of them
has, control of the person.

(3) A person has “control” of a charity that is a trust if—

(a) the person is a trustee of the charity and some or all of the
powers of the trustees of the charity could be exercised by—

(i) the person acting alone, or

(ii) 5by the person acting together with any other persons
who are trustees of the charity and who are connected
with the person,

(b) the person, alone or together with other persons, has power
to appoint or remove a trustee of the charity, or

(c) 10the person, alone or together with other persons, has any
power of approval or direction in relation to the carrying-out
by the trustees of any of their functions.

(4) Subsection (3) is in addition to, and does not limit, subsection (1); and
both of those subsections are subject to subsection (5).

(5) 15For the purposes of this Part, a regulator is to be treated as not having
control of any company regulated by the regulator.

(6) Section 995 of this Act (control) does not apply for the purposes of
this Part.

257TE Minor definitions etc

(1) 20In this Part—

• “arrangements” (except as used, in sections 257LB and 257QK,
  in the expressions “issuing arrangements” and “repayment
  arrangements”) includes any scheme, arrangement or
  understanding of any kind, whether or not legally
  25enforceable, involving a single transaction or two or more
  transactions,

• “bonus shares” means shares which are issued otherwise than
  for payment (whether in cash or otherwise),

• “compliance statement” has the meaning given by section
  30257PB,

• “director”—

  (a)

  is read in accordance with section 452 of CTA 2010 but
  as if “company” in that section included a charity that
  is a trust, and

  (b)

  35in relation to a charity that is a trust (but subject to
  section 257LF(9)), includes (in particular) each trustee
  of the trust,

• “disposal”, in relation to any shares or other investments,
  includes disposal of an interest or right in or over them,

• 40“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
  45ordinary share capital,

• “parent company” means a company that has one or more
  qualifying subsidiaries,

• “qualifying subsidiary” has the meaning given by section
  257MU, and

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• “single company” means a company that does not have any
  qualifying subsidiaries.

(2) 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
5sale at that time in the open market free from any interest or right
which exists by way of security in or over it.”

Part 2 Consequential amendments

2 (1) Section 98 of TMA 1970 (penalties) is amended as follows.

(2) 10In column 1 of the Table, after the entry for sections 257GG and 257GH(1)
and (2) of ITA 2007, insert—

(3) In column 2 of the Table, after the entry for sections 257GE and 257GF of ITA
2007, insert—

3 ITA 2007 is amended as follows.

4 In section 2 (overview of Act) after subsection (5A) insert—

“(5B) Part 5B is about relief for social investments.”

5 In section 24A(7)(d) (share loss relief on the disposal of certain investments
20not subject to the limit on deductions imposed by section 24A) after sub-
paragraph (ii) insert “, or

(iii) where SI relief is attributable to the shares in question
as determined in accordance with Part 5B (income tax
relief for social investments).”

6 25In section 26(1)(a) (provisions giving rise to deductions at Step 6 of the
calculation in section 23) after the entry for Chapter 1 of Part 5A of ITA 2007
insert—

• “Chapter 1 of Part 5B (relief for social investments),”.

7 In section 27(5) (order in which certain tax reductions are to be made) after
30the entry for Chapter 1 of Part 5A of ITA 2007 insert—

• “Chapter 1 of Part 5B (relief for social investments),”.

8 In section 29(4B) (limit on certain tax reductions) after the entry for Chapter
1 of Part 5 of ITA 2007 insert—

• “Chapter 1 of Part 5B (relief for social investments),”.

9 35In section 32 (liabilities to income tax not dealt with in the calculation under

Chapter 3 of Part 2) after the entry for section 257G of ITA 2007 insert—

• “under section 257S (withdrawal or reduction of relief for social
  investments),”.

10 In section 392 (loan to buy interest in close company) after subsection (3)
5insert—

“(3A) Subsection (2) does not apply if at any time the individual by whom
the shares are acquired or the money is lent, or that individual’s
spouse or civil partner, makes—

(a) a claim under Part 5B of this Act for relief in respect of the
10amount invested in acquiring the shares or (as the case may
be) in return for the debentures in respect of the money lent,
or

(b) a claim in respect of the amount under Schedule 8B to TCGA
1992 (hold-over relief for gains re-invested in social
15enterprises).

(3B) For the purposes of subsection (3A)(a) “debenture” includes any
instrument creating or acknowledging indebtedness.”

11 In section 416 (gift aid: meaning of “qualifying donation”) after subsection
(6) insert—

“(6A) 20Condition EA is that the payment is by way of, or amounts in
substance to, waiver by the individual of entitlement to sums
(whether of principal or return) due to the individual from the
charity in respect of an amount—

(a) advanced to the charity, and

(b) 25in respect of which a person, whether or not the individual,
has obtained relief under Part 5B (relief for social
investments).”

12 In section 1014(5)(b) (orders and regulations not subject to negative
procedure) after sub-paragraph (iii) insert—

“(iiia) 30section 257MB (amendment of Part 5B: amounts that
may be raised from social investments; and State
aid),”.

13 In section 1022 (meaning of “debenture”) after subsection (1) insert—

“(1A) For the meaning of “debenture” in sections 257KB(3) to (5), 257L(4),
35257LA(2) and 392(3A)(a), see also sections 257KB(6), 257L(6),
257LA(4) and 392(3B).”

Section 53

SCHEDULE 10 Investments in social enterprises: capital gains

1 TCGA 1992 is amended as follows.

2 After section 255 insert—

“Investments in social enterprises

255A Hold-over relief for gains re-invested in social enterprises

Schedule 8B to this Act (which provides relief in respect of gains re-
5invested in social enterprises) has effect.

255B Gains and losses on investments in social enterprises

(1) For the purpose of determining the gain or loss on any disposal of an
asset by an individual where—

(a) an amount of SI relief is attributable to the asset, and

(b) 10apart from this subsection there would be a loss,

treat the consideration given by the individual for the acquisition of
the asset as reduced by the amount of the SI relief.

(2) If—

(a) an individual disposes of an asset,

(b) 15an amount of SI relief is attributable to the asset,

(c) the disposal takes place after the end of the 3 years beginning
with the day when the individual acquired the asset, and

(d) apart from this subsection, there would be a gain on the
disposal,

20the gain is not a chargeable gain, subject to section 255C.

(3) Despite section 16(2), subsection (2) above does not apply to a
disposal on which a loss accrues.

(4) Any question as to—

(a) which of any assets acquired by an individual at different
25times a disposal relates to, being assets to which SI relief is
attributable, or

(b) whether a disposal relates to assets to which SI relief is
attributable or to other assets,

is to be determined for the purposes of capital gains tax as provided
30by section 257TA of ITA 2007.

(5) Chapter 1 of this Part has effect subject to subsection (4).

(6) Sections 104, 105 and 106A do not apply to assets to which SI relief is
attributable.

(7) There are to be made all such adjustments of capital gains tax,
35whether by way of assessment or by way of discharge or repayment
of tax, as may be required in consequence of SI relief being given or
withdrawn.

(8) In this section and sections 255C to 255E “SI relief” means relief
under Part 5B of ITA 2007 (income tax relief for investments in social
40enterprises).

(9) That Part applies for the purposes of this section and sections 255C
to 255E to determine whether SI relief is attributable to any asset and,
if so, the amount of SI relief so attributable.

255C Application of section 255B(2) where maximum SI relief not obtained

(1) Subsection (2) applies if—

(a) an individual’s liability to income tax has been reduced (or
treated by virtue of section 257T of ITA 2007 (spouses or civil
5partners) as reduced) for any tax year under section 257JA of
ITA 2007 (SI relief) in respect of the acquisition of an asset,

(b) the amount of the reduction (“D”) is less than the amount
given by—

(c) 15D is not within paragraph (b) solely by virtue of section 29(2)
and (3) of ITA 2007.

(2) If the individual disposes of the asset and there is a gain on the
disposal, section 255B(2) has effect in relation to the gain as if it were
reduced by multiplying it by—

20

(3) In this section “SI rate” has the meaning given by section 257JA(5) of
ITA 2007.

255D Application of section 255B(2) where SI relief has been reduced

(1) Subsection (2) applies if before a disposal of an asset—

(a) 25value is received in circumstances where SI relief attributable
to the asset is reduced by an amount under section 257Q(1)(a)
of ITA 2007, or

(b) there is a repayment, redemption, repurchase or payment in
circumstances where SI relief attributable to the asset is
30reduced by an amount under section 257QJ(2)(a) of ITA 2007,
or

(c) paragraphs (a) and (b) both apply.

(2) If section 255B(2) applies on the disposal but section 255C does not,
section 255B(2) applies only to so much of the gain as remains after
35deducting so much of it as is found by multiplying it by the
fraction—

(3) If sections 255B(2) and 255C apply on the disposal, section 255B(2)
45applies only to so much of the gain as is found by—

(a) taking the part of the gain found under section 255C, and

(b) deducting from that part so much of it as is found by
multiplying it by the fraction mentioned in subsection (2).

(4) If the SI relief given in respect of the asset is reduced as mentioned in
5subsection (1) by more than one amount, the amount referred to as A
in subsection (2) is to be taken to be equal to the aggregate of those
amounts.

(5) The amount referred to in subsection (2) as B is to be found without
regard to any reduction mentioned in subsection (1).

255E 10Reorganisations involving shares to which SI relief is attributable

(1) Subsection (2) applies if an individual holds shares which form part
of the ordinary share capital of a company and include shares of
more than one of the following kinds—

(a) shares to which SI relief is attributable and to which
15subsection (3) applies,

(b) shares to which SI relief is attributable and to which
subsection (3) does not apply, and

(c) shares to which SI relief is not attributable and to which
subsection (3) does not apply.

(2) 20If there is a reorganisation within the meaning of section 126
affecting the shares listed in subsection (1), section 127 applies
separately to those shares so that shares of each kind are treated as a
separate holding of original shares and identified with a separate
new holding.

(3) 25This subsection applies to any shares if—

(a) expenditure on the shares has been set under Schedule 8B to
this Act against the whole or part of any gain, and

(b) in relation to the shares there has been no chargeable event
for the purposes of that Schedule.

(4) 30If—

(a) an individual holds shares (“the existing holding”) which
form part of the ordinary share capital of a company,

(b) there is, by virtue of any such allotment for payment as is
mentioned in section 126(2)(a), a reorganisation affecting the
35existing holding, and

(c) immediately following the reorganisation, SI relief is
attributable to the existing holding or the allotted shares,

sections 127 to 130 do not apply in relation to the existing holding.

(5) Subject to subsection (6), sections 135 and 136 do not apply in respect
40of shares to which SI relief is attributable.

(6) Subsection (5) does not have effect to disapply section 135 or 136 in a
case where the original shares are shares to which SI relief is
attributable if—

(a) the new holding consists of new ordinary shares which meet
45conditions A and B of section 257L of ITA 2007,