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231 | Restriction on withdrawal of relief under section 224 |
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(1) | This section applies if, because of a repayment, any investment relief which is |
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attributable under Schedule 15 to FA 2000 to any shares is withdrawn under |
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paragraph 56(2) of that Schedule. |
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(2) | For the purposes of this section “the relevant amount” is the amount |
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determined by the formula—![equation: plus[char[A],minus[times[num[5.0000000000000000,"5"],char[B]]]]](missing.gif) |
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A is the amount of the repayment, and |
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B is the total amount of investment relief withdrawn because of the |
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(3) | If the relevant amount does not exceed £1,000, the repayment is ignored for the |
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purposes of section 224(1), unless repayment arrangements are in existence at |
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(a) | beginning 12 months before the issue of the shares mentioned in |
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(b) | ending at the end of the issue date. |
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(4) | For this purpose “repayment arrangements” means arrangements which |
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(a) | for a repayment by the issuing company or any subsidiary of that |
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(b) | for anyone to be entitled to such a repayment, |
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(5) | Subsection (4)(a) applies in relation to a subsidiary of the issuing company |
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whether or not it is such a subsidiary when the arrangements were made. |
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(6) | If the repayment is not ignored by virtue of subsection (3), the amount received |
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because of the repayment is treated for the purposes of section 224(2) as an |
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amount equal to the relevant amount. |
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(a) | “investment relief” has the same meaning as in Schedule 15 to FA 2000 |
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(corporate venturing scheme), and |
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(b) | references to the withdrawal of investment relief include its reduction. |
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232 | Acquisition of a trade or trading assets |
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(1) | Any EIS relief attributable to any shares in a company held by an individual is |
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(a) | at any time in period A, the company or any qualifying subsidiary— |
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(i) | begins to carry on as its trade, or as part of its trade, a trade |
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which was previously carried on at any time in that period |
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otherwise than by the company or any qualifying subsidiary, or |
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(ii) | acquires the whole, or the greater part, of the assets used for the |
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purposes of a trade previously so carried on, and |
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(b) | the individual is a person, or one of a group of persons, to whom |
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subsection (2) or (3) applies. |
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(2) | This subsection applies to any person or group of persons— |
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(a) | to whom an interest amounting in total to more than a half share in the |
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trade (as previously carried on) belonged at any time in period A, and |
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(b) | who is or are a person or group of persons to whom such an interest in |
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the trade carried on by the company belongs or has, at any such time, |
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(3) | This subsection applies to any person or group of persons who— |
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(a) | control or, at any time in period A, have controlled the company, and |
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(b) | is or are a person or group of persons who, at any such time, controlled |
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another company which previously carried on the trade. |
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(4) | For the purposes of subsection (2)— |
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(a) | the person to whom a trade belongs and, if a trade belongs to two or |
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more persons, their respective shares in that trade are determined in |
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accordance with section 344(1)(a) and (b), (2) and (3) of ICTA, and |
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(b) | any interest, rights or powers of a person who is an associate of another |
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person are treated as those of that other person. |
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(5) | In determining whether any EIS relief attributable to any shares in the issuing |
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company held by an individual who— |
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(a) | is a director of, or of a company which is a partner of, the issuing |
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company or any qualifying subsidiary, and |
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(b) | is in receipt of, or entitled to receive, remuneration as such a director |
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falling within section 169(2) (reasonable remuneration for services), |
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| is to be withdrawn, the reference in subsection (3)(b), and (so far as relating to |
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that provision) the reference in subsection (1)(a)(i), to any time in period A are |
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to be read as references to any time before the end of period A. |
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(6) | Section 167(3) (director also an employee) applies for the purposes of |
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subsection (5) as it applies for the purposes of section 168, and in subsection (5) |
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“remuneration” includes any benefit or facility. |
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(7) | In this section “trade” includes any business or profession, and references to a |
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trade previously carried on include references to part of such a trade. |
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233 | Acquisition of share capital |
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(1) | Any EIS relief attributable to any shares in a company held by an individual is |
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(a) | the company comes to acquire all of the issued share capital of another |
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company at any time in period A, and |
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(b) | the individual is a person, or one of a group of persons, to whom |
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(2) | This subsection applies to any person or group of persons who— |
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(a) | control or have, at any time in period A, controlled the company, and |
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(b) | is or are a person or group of persons who, at any such time, controlled |
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(3) | In determining whether any EIS relief attributable to any shares in the issuing |
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company held by an individual who— |
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(a) | is a director of, or of a company which is a partner of, the issuing |
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company or any qualifying subsidiary, and |
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(b) | is in receipt of, or entitled to receive, remuneration as such a director |
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falling within section 169(2), |
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| is to be withdrawn, the reference in subsection (2)(b) to any time in period A is |
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to be read as a reference to any time before the end of period A. |
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(4) | Section 167(3) applies for the purposes of subsection (3) as it applies for the |
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purposes of section 168, and in subsection (3) “remuneration” includes any |
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234 | Relief subsequently found not to have been due |
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(1) | Any EIS relief obtained by the investor which is subsequently found not to |
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have been due must be withdrawn. |
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(2) | EIS relief obtained by the investor in respect of the relevant shares may not be |
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(a) | that the requirements of sections 174 and 175 (the purpose of the issue |
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and use of money raised requirements) are not met in respect of the |
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(b) | that the issuing company is not a qualifying company in relation to the |
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| unless the requirements of subsection (3) are met. |
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(3) | The requirements of this subsection are met if either— |
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(a) | the issuing company has given notice under section 241, or paragraph |
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16(2) or (4) of Schedule 5B to TCGA 1992, (information to be provided |
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by issuing company etc) in relation to the relevant issue of shares, or |
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(b) | an officer of Revenue and Customs has given notice to that company |
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stating the officer’s opinion that, because of the ground in question, the |
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whole or any part of the EIS relief obtained by any individual in respect |
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of shares included in the relevant issue of shares was not due. |
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(4) | In this section “the relevant issue of shares” means the issue of shares in the |
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issuing company which includes the relevant shares. |
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Withdrawal or reduction of EIS relief: procedure |
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235 | Assessments for the withdrawal or reduction of EIS relief |
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If any EIS relief which has been obtained falls to be withdrawn or reduced |
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under Chapter 6, it must be withdrawn or reduced by the making of an |
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assessment to income tax for the tax year for which the relief was obtained. |
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236 | Appeals against section 234(3)(b) notices |
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(1) | For the purposes of the provisions of TMA 1970 relating to appeals, the giving |
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of notice by an officer of Revenue and Customs under section 234(3)(b) is taken |
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to be a decision disallowing a claim by the issuing company. |
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(2) | If any issue has been determined on an appeal brought by virtue of paragraph |
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1A(6) of Schedule 5B to TCGA 1992 (appeal against notice that shares never |
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have been, or have ceased to be, eligible shares), the determination is |
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conclusive for the purposes of any appeal brought by virtue of subsection (1) |
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on which that issue arises. |
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237 | Time limits for assessments |
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(1) | An officer of Revenue and Customs may not— |
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(a) | make an assessment for withdrawing or reducing the EIS relief |
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attributable to any of the relevant shares, or |
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(b) | give a notice under section 234(3)(b), |
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| more than 6 years after the end of the relevant tax year. |
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(2) | In subsection (1) “the relevant tax year” means— |
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(a) | the tax year in which the time mentioned in section 175(3) (the use of |
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money raised requirement) falls, or |
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(b) | the tax year in which the event which causes the EIS relief to be |
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withdrawn or reduced occurs, |
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(3) | Subsection (1) is without prejudice to section 36 of TMA 1970 (fraudulent or |
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238 | Cases where assessment not to be made |
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(1) | No assessment for withdrawing or reducing EIS relief in respect of shares |
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issued to an individual may be made because of an event occurring after the |
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(2) | Subsection (3) applies if an individual has, by a disposal or disposals to which |
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section 209(3) applies, disposed of all shares which— |
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(a) | have been issued to the individual by the issuing company, and |
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(i) | to which EIS relief is attributable, or |
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(ii) | in relation to which period A has not come to an end. |
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(3) | No assessment for withdrawing or reducing EIS relief in respect of those shares |
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may be made because of any subsequent event unless the event occurs at a time |
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when the individual is connected with the company within the meaning of |
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239 | Date from which interest is chargeable |
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(1) | In its application to an assessment made by virtue of section 235 in the case of |
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relief withdrawn or reduced by virtue of a provision listed in column 1 of the |
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following table, section 86 of TMA 1970 (interest on overdue income tax) has |
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effect as if the relevant date were given by the corresponding entry in column |
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| | | | | | | The date of the event which caused the |
| | 5 | | | withdrawal or reduction of EIS relief |
| | | | | | | | | | The date of the making of the loan (see |
| | | | | | | | | | | | 10 | | | The date of the grant of the option |
| | | | | The date of the receipt of value |
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(2) | The reference in the second entry in the table to the making of a loan is to be |
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read in accordance with section 164(3). |
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240 | Information to be provided by the investor |
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(1) | This section applies if the investor has obtained EIS relief in respect of the |
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relevant shares, and an event occurs as a result of which— |
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(a) | the investor is not a qualifying investor in relation to the shares, |
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(b) | the EIS relief falls to be withdrawn or reduced by virtue of section 164 |
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(no linked loans requirement), |
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(c) | the EIS relief falls to be withdrawn or reduced under— |
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(i) | section 209 (disposal of shares), |
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(ii) | section 211 (call options), or |
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(iii) | section 212 (put options), or |
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(d) | the EIS relief falls to be withdrawn or reduced under section 213 |
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(receipt of value by the investor), or would fall to be so withdrawn or |
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reduced but for section 222 (receipt of replacement value). |
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(2) | The investor must within 60 days of coming to know of the event give a notice |
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to an officer of Revenue and Customs containing particulars of the event. |
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(a) | is required under this section to give notice of a receipt of value which |
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is within section 213, or would be within that section but for section 222, |
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(b) | has knowledge of any replacement value received (or expected to be |
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received) because of a qualifying receipt, |
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| the notice must include particulars of that receipt of replacement value (or |
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(4) | In subsection (3) “qualifying receipt” and “replacement value” are to be read in |
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accordance with section 222. |
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