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Value received by other persons |
| | 14. - (1) Sub-paragraph (2) below applies where an individual subscribes for eligible shares ("the shares") in a company and at any time in the seven year period the company or any subsidiary-
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(a) repays, redeems or repurchases any of its share capital which belongs to any member other than the individual or an individual falling within sub-paragraph (3) below, or |
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(b) makes any payment (directly or indirectly) to any such member, or to his order or for his benefit, for the giving up of his right to any of the share capital of the company or subsidiary on its cancellation or extinguishment. |
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(2) The shares shall be treated for the purposes of this Schedule-
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(a) if the repayment, redemption, repurchase or payment in question is made or effected on or before the date of the issue of the shares, as never having been eligible shares; and |
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(b) if it is made or effected after that date, as ceasing to be eligible shares on the date when it is made or effected. |
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(3) An individual falls within this sub-paragraph if the repayment, redemption, repurchase or payment in question-
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(a) gives rise to a qualifying chargeable event in respect of him, or |
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(b) causes any relief under Chapter III of Part VII of the Taxes Act attributable to his shares in the company to be withdrawn or reduced by virtue of section 299 or 300(2)(a) of that Act. |
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(4) In sub-paragraph (3) above "qualifying chargeable event" means-
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(a) a chargeable event falling within paragraph 3(1)(a) or (b) above; or |
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(b) a chargeable event falling within paragraph 3(1)(e) above by virtue of sub-paragraph (1)(b) of paragraph 13 above (as it applies by virtue of sub-paragraph (2)(a) of that paragraph). |
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(5) Where-
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(a) a company issues share capital ("the original shares") of nominal value equal to the authorised minimum (within the meaning of the Companies Act 1985) for the purposes of complying with the requirements of section 117 of that Act (public company not to do business unless requirements as to share capital complied with); and |
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(b) after the registrar of companies has issued the company with a certificate under section 117, it issues eligible shares,
the preceding provisions of this paragraph shall not apply in relation to any redemption of any of the original shares within 12 months of the date on which those shares were issued.
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(6) In relation to companies incorporated under the law of Northern Ireland references in sub-paragraph (5) above to the Companies Act 1985 and to section 117 of that Act shall have effect as references to the Companies (Northern Ireland) Order 1986 and to Article 127 of that Order.
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(7) References in this paragraph to a subsidiary of a company are references to a company which at any time in the relevant period is a 51 per cent subsidiary of the first mentioned company, whether or not it is such a subsidiary at the time of the repayment, redemption, repurchase or payment in question.
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Investment-linked loans |
| | 15. - (1) Where at any time in the relevant period an investment-linked loan is made by any person to an individual who subscribes for eligible shares ("the shares") in a company, the shares shall be treated for the purposes of this Schedule-
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(a) if the loan is made on or before the date of the issue of the shares, as never having been eligible shares; and |
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(b) if the loan is made after that date, as ceasing to be eligible shares on the date when the loan is made. |
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(2) A loan made by any person to an individual is an investment-linked loan for the purposes of this paragraph if the loan is one which would not have been made, or would not have been made on the same terms, if the individual had not subscribed for the shares or had not been proposing to do so.
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(3) References in this paragraph to the making by any person of a loan to an individual include references-
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(a) to the giving by that person of any credit to that individual; and |
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(b) to the assignment or assignation to that person of any debt due from that individual. |
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(4) In this paragraph any reference to an individual includes a reference to an associate of his."
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Supplementary provisions |
| | 36. After paragraph 15 there shall be inserted the following paragraphs-
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"Information |
| | 16. - (1) Where, in relation to any relevant shares held by an individual-
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(a) a chargeable event falling within paragraph 3(1)(a) or (b) above occurs at any time in the five year period, |
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(b) a chargeable event falling within paragraph 3(1)(c) or (d) above occurs, or |
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(c) a chargeable event falling within paragraph 3(1)(e) above occurs by virtue of paragraph 12(2)(b), 13(1)(b) or 15(1)(b) above,
the individual shall within 60 days of his coming to know of the event give a notice to the inspector containing particulars of the circumstances giving rise to the event.
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(2) Where, in relation to any relevant shares in a company, a chargeable event falling within paragraph 3(1)(e) above occurs by virtue of paragraph 1A(1) or (2), 13(1)(b) or 14(2)(b) above-
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(b) any person connected with the company who has knowledge of that matter,
shall within 60 days of the event or, in the case of a person within paragraph (b) above, of his coming to know of it, give a notice to the inspector containing particulars of the circumstances giving rise to the event.
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(3) A chargeable event falling within paragraph 3(1)(e) above which, but for paragraph 1A(5) above, would occur at any time by virtue of paragraph 1A(1) or (2) above shall be treated for the purposes of sub-paragraph (2) above as occurring at that time.
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(4) Where a company has issued a certificate under section 306(2) of the Taxes Act (as applied by paragraph 6 above) in respect of any eligible shares in the company, and the condition in paragraph 1(2)(g) above is not satisfied in relation to the shares-
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(b) any person connected with the company who has knowledge of that matter,
shall within 60 days of the time mentioned in section 289(3) of the Taxes Act or, in the case of a person within paragraph (b) above, of his coming to know that the condition is not satisfied, give notice to the inspector setting out the particulars of the case.
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(5) If the inspector has reason to believe that a person has not given a notice which he is required to give-
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(a) under sub-paragraph (1) or (2) above in respect of any chargeable event; or |
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(b) under sub-paragraph (4) above in respect of any particular case,
the inspector may by notice require that person to furnish him within such time (not being less than 60 days) as may be specified in the notice with such information relating to the event or case as the inspector may reasonably require for the purposes of this Schedule.
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(6) Where a claim is made under this Schedule in respect of shares in a company and the inspector has reason to believe that it may not be well founded by reason of any such arrangements as are mentioned in paragraphs 1(2)(d) or 11(1) above, or section 293(8) or 308(2)(e) of the Taxes Act, he may by notice require any person concerned to furnish him within such time (not being less than 60 days) as may be specified in the notice with-
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(a) a declaration in writing stating whether or not, according to the information which that person has or can reasonably obtain, any such arrangements exist or have existed; |
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(b) such other information as the inspector may reasonably require for the purposes of the provision in question and as that person has or can reasonably obtain. |
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(7) For the purposes of sub-paragraph (6) above, the persons who are persons concerned are-
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(a) in relation to paragraph 1(2)(d) above, the claimant, the company and any person controlling the company; |
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(b) in relation to paragraph 11(1) above, the claimant, the company and any person connected with the company; and |
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(c) in relation to section 293(8) or 308(2)(e) of the Taxes Act, the company and any person controlling the company;
and for those purposes the references in paragraphs (a) and (b) above to the claimant include references to any person to whom the claimant appears to have made a disposal within marriage of any of the shares in question.
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(8) Where deferral relief is attributable to shares in a company-
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(a) any person who receives from the company any payment or asset which may constitute value received (by him or another) for the purposes of paragraph 13 above; and |
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(b) any person on whose behalf such a payment or asset is received,
shall, if so required by the inspector, state whether the payment or asset received by him or on his behalf is received on behalf of any person other than himself and, if so, the name and address of that person.
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(9) Where a claim has been made under this Schedule in relation to shares in a company, any person who holds or has held shares in the company and any person on whose behalf any such shares are or were held shall, if so required by the inspector, state-
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(a) whether the shares which are or were held by him or on his behalf are or were held on behalf of any person other than himself; and |
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(b) if so, the name and address of that person. |
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(10) No obligation as to secrecy imposed by statute or otherwise shall preclude the inspector from disclosing to a company that relief has been given or claimed in respect of a particular number or proportion of its shares.
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