Finance Bill (HC Bill 57)

(c) those shares or securities were first issued by the relevant
company in order to raise money for the purposes of
promoting growth and development of—

(i) 15if the relevant company is a single company, the
business of that company, and

(ii) if it is a parent company, what would be the business
of the group if the activities of the group companies
taken together were regarded as one business.””

(3) 20In subsection (3)—

(a) in paragraph (ea), for “capital schemes” substitute “finance
investments”,

(b) after that paragraph insert—

“(eaa) the maximum risk finance investments when the
25relevant holding is issued (see section 292AA),

(eab) the maximum risk finance investments during the 5-
year post-investment period (see section 292AB),”,”

(c) omit paragraph (eb),

(d) after paragraph (g) insert—

“(ga) 30the permitted company age requirement (see section
294A),” and”

(e) after paragraph (ja) insert—

“(jb) the proportion of skilled employees (see section
297B),”.”

7 (1) 35Section 292A (the maximum amount raised annually through risk capital
schemes requirement) is amended as follows.

(2) For subsection (2) substitute—

“(2) In subsection (1), the reference to relevant investments made in the
relevant company includes—

(a) 40relevant investments made in any company that has at any
time in the year mentioned there been a 51% subsidiary of the
relevant company (including investments made in such a
company before it became such a subsidiary but, if it was not
a subsidiary at the end of that year, not those made after it last
45ceased to be such a subsidiary), and

(b) any other relevant investment made in a company if—

(i) the money raised by the investment has been
employed for the purposes of a trade carried on by
that company or another person, and

(ii) in that year, after that investment was made, the trade
5(or a part of it) became a relevant transferred trade
(see subsection (2B)).

(2A) If only a proportion of the money raised by a relevant investment is
employed for the purposes of a trade which becomes a relevant
transferred trade, the reference in subsection (2)(b) to the relevant
10investment is to be read as a reference to the corresponding
proportion of that investment.

(2B) Where—

(a) in the year mentioned in subsection (1) a trade is
transferred—

(i) 15to the relevant company,

(ii) to a company that is, or has at any time during that
year been, a 51% subsidiary of the relevant company,
or

(iii) to a partnership of which a company within sub-
20paragraph (i) or (ii) is a member,

(including where it is transferred to a company within sub-
paragraph (ii), or a partnership of which such a company is a
member, at a time in the year before the company became
such a subsidiary but not where it is transferred to such a
25company or partnership in that year after the company last
ceased to be such a subsidiary), and

(b) that trade or a part of it was previously (at any time) carried
on by another person,

the trade or part mentioned in paragraph (b) becomes a “relevant
30transferred trade” at the time it is transferred as mentioned in
paragraph (a).””

(3) In subsection (3)—

(a) after paragraph (b) insert—

“(ba) an investment is made in the company and (at any
35time) the company provides a compliance statement
under section 257PB (tax relief for social investments)
in respect of the investment, or”, and”

(b) in paragraph (c), for “Community Guidelines on Risk Capital
Investments in Small and Medium-sized Enterprises” substitute
40“European Commission’s Guidelines on State aid to promote risk
finance investment”.

(4) In subsection (4) for “and (2)” substitute “to (2B)”.

(5) After subsection (4) insert—

“(4A) Section 257KB applies in determining for those purposes when an
45investment within subsection (3)(ba) is made as it applies for the
purposes of Part 5B (tax relief on social investments).””

(6) In subsection (5), after “205” insert “, 257ED or 257PB”.