|
| |
|
(a) | if it is greater than the amount given by the formula set out below, be |
| |
reduced by that amount, and |
| |
(b) | in any other case, be withdrawn. |
| |
| The formula is—![equation: cross[char[R],char[S]]](missing.gif) |
| |
| 5 |
R is the amount or value of the consideration received by the investor for |
| |
| |
S is the savings rate for the tax year for which the EIS relief was obtained. |
| |
(4) | This section does not apply to a disposal of shares to which an amount of EIS |
| |
relief is attributable if— |
| 10 |
(a) | the disposal was made by an individual (“A”) to another individual |
| |
| |
(b) | A and B were married to, or were civil partners of, each other and living |
| |
together at the time of the disposal. |
| |
(5) | Section 246 contains rules for determining which shares of any class are treated |
| 15 |
as disposed of for the purposes of this section if the investor disposes of some |
| |
but not all the shares of that class which are held by the investor. |
| |
210 | Cases where maximum EIS relief not obtained |
| |
(1) | If the investor’s liability to income tax is reduced for any tax year in respect of |
| |
| 20 |
(a) | the amount of the reduction (“A”), is less than |
| |
(b) | the amount (“B”) which is equal to tax at the savings rate for that year |
| |
on the amount on which the investor claims EIS relief in respect of the |
| |
| |
| section 209(3) has effect in relation to a disposal of any of the shares as if the |
| 25 |
amount or value referred to as “R” were reduced by multiplying it by the |
| |
fraction—![equation: over[char[A],char[B]]](missing.gif) |
| |
(2) | If section 158(1) and (2) applies in the case of any issue of shares as if part of the |
| |
issue had been issued in a previous tax year, subsection (1) has effect as if that |
| |
part and the remainder were separate issues of shares (and that part had been |
| 30 |
issued on a day in the previous tax year). |
| |
(3) | If the amount of EIS relief attributable to any of the relevant shares has been |
| |
reduced before the EIS relief was obtained, the amount referred to in |
| |
subsection (1) as A is to be treated for the purposes of that subsection as the |
| |
amount that it would have been without that reduction. |
| 35 |
|
| |
|
| |
|
(4) | Subsection (3) does not apply to a reduction of EIS relief by virtue of section |
| |
201(4) (attribution of EIS relief if there is a corresponding issue of bonus |
| |
| |
| |
(1) | This section applies if the investor grants an option which, if exercised, would |
| 5 |
bind the investor to sell any of the relevant shares. |
| |
(2) | The grant of the option is treated for the purposes of section 209 as a disposal |
| |
of the shares to which the option relates. |
| |
(3) | Nothing in this section prejudices section 177 (no pre-arranged exits). |
| |
| 10 |
(1) | This section applies if, at any time in period A, a person grants the investor an |
| |
option which, if exercised, would bind the grantor to purchase any of the |
| |
| |
(2) | Any EIS relief attributable to the shares to which the option relates must be |
| |
| 15 |
(3) | For the purposes of subsection (2) the shares to which an option relates are |
| |
| |
(a) | the option were exercised immediately after the grant, and |
| |
(b) | any shares in the issuing company acquired by the investor after the |
| |
grant were disposed of immediately after being acquired, |
| 20 |
| would be treated for the purposes of section 209 as disposed of in pursuance of |
| |
| |
Value received by investor |
| |
213 | Value received by the investor |
| |
(1) | This section applies if the investor receives any value from the issuing |
| 25 |
company at any time in period C relating to the relevant shares. |
| |
(2) | Any EIS relief attributable to the shares must— |
| |
(a) | if it is greater than the amount given by the formula set out below, be |
| |
reduced by that amount, and |
| |
(b) | in any other case, be withdrawn. |
| 30 |
| The formula is—![equation: cross[char[R],char[S]]](missing.gif) |
| |
| |
R is the amount of the value received by the investor, and |
| |
S is the savings rate for the tax year for which the EIS relief was obtained. |
| |
(3) | This section is subject to the following sections— |
| 35 |
|
| |
|
| |
|
(a) | section 214 (value received: receipts of insignificant value), |
| |
(b) | section 218 (value received where there is more than one issue of |
| |
| |
(c) | section 219 (value received where part of share issue treated as made in |
| |
| 5 |
(d) | section 220 (cases where maximum EIS relief not obtained), |
| |
(e) | section 221 (receipts of value by and from connected persons etc), and |
| |
(f) | section 222 (receipt of replacement value). |
| |
| Sections 218 to 220 are to be applied in the order in which they appear in this |
| |
| 10 |
(4) | Value received is to be ignored, for the purposes of this section, to the extent to |
| |
which EIS relief attributable to the shares has already been withdrawn or |
| |
| |
(5) | For the purposes of this section and sections 214 to 223, an individual who |
| |
acquires any relevant shares on such a transfer as is mentioned in section 245 |
| 15 |
(spouses or civil partners) is treated as the investor. |
| |
214 | Value received: receipts of insignificant value |
| |
(1) | Section 213(2) does not apply if the receipt of value is a receipt of insignificant |
| |
| |
| This is subject to subsection (2). |
| 20 |
| |
(a) | value is received (“the relevant receipt”) by the investor from the |
| |
issuing company at any time in period C relating to the relevant shares, |
| |
(b) | the investor has received from the issuing company one or more |
| |
receipts of insignificant value at a time or times— |
| 25 |
(i) | during that period, but |
| |
(ii) | not later than the time of the relevant receipt, and |
| |
(c) | the total amount of the value of the receipts within paragraph (a) and |
| |
(b) is not an amount of insignificant value, |
| |
| the investor is treated for the purposes of this Chapter as if the relevant receipt |
| 30 |
had been a receipt of an amount of value equal to that total amount. |
| |
(3) | A receipt does not fall within subsection (2)(b) if it has previously formed part |
| |
of a total amount falling within subsection (2)(c). |
| |
215 | Meaning of “receipts of insignificant value” |
| |
(1) | This section applies for the purposes of section 214. |
| 35 |
(2) | “A receipt of insignificant value” means a receipt of an amount of insignificant |
| |
value, that is, an amount of value which— |
| |
(a) | is not more than £1,000, or |
| |
(b) | if it is more than £1,000, is insignificant in relation to the amount |
| |
subscribed by the investor for the relevant shares. |
| 40 |
| This is subject to subsection (3). |
| |
(3) | If at any time in the period— |
| |
(a) | beginning 12 months before the issue of the relevant shares, and |
| |
(b) | ending at the end of the issue date, |
| |
|
| |
|
| |
|
| repayment arrangements are in existence, no amount of value received by the |
| |
investor is treated as a receipt of insignificant value. |
| |
(4) | For this purpose “repayment arrangements” means arrangements which |
| |
provide for the investor to receive, or to be entitled to receive, any value from |
| |
the issuing company at any time in period C relating to the relevant shares. |
| 5 |
(5) | For the purposes of this section— |
| |
(a) | the references to the investor include references to any person who at |
| |
any time in period C relating to the relevant shares is an associate of the |
| |
investor (whether or not that person is such an associate at the material |
| |
| 10 |
(b) | the reference in subsection (4) to the issuing company includes a |
| |
reference to a person who at any time in period C relating to the |
| |
relevant shares is connected with that company (whether or not that |
| |
person is so connected at the material time). |
| |
216 | When value is received |
| 15 |
(1) | This section applies for the purposes of sections 213 (value received by the |
| |
investor) and 218 (value received where there is more than one issue of shares). |
| |
(2) | The investor receives value from the issuing company at any time when the |
| |
| |
(a) | repays, redeems or repurchases any of its share capital or securities |
| 20 |
which belong to the investor or makes any payment to the investor for |
| |
giving up the investor’s right to any of the issuing company’s share |
| |
capital or any security on its cancellation or extinguishment, |
| |
(b) | repays, in pursuance of any arrangements for or in connection with the |
| |
acquisition of the shares in respect of which EIS relief is claimed, any |
| 25 |
debt owed to the investor other than a debt which was incurred by the |
| |
| |
(i) | on or after the date of issue of those shares, and |
| |
(ii) | otherwise than in consideration of the extinguishment of a debt |
| |
incurred before that date, |
| 30 |
(c) | makes to the investor any payment for giving up on its extinguishment |
| |
the investor’s right to any debt, other than a debt in respect of a |
| |
repayment of the kind mentioned in section 168(2)(a) or (f) (ignoring of |
| |
certain expenses or remuneration) or an ordinary trade debt, |
| |
(d) | releases or waives any liability of the investor to the issuing company |
| 35 |
or discharges or undertakes to discharge any liability of the investor to |
| |
| |
(e) | makes a loan or advance to the investor which has not been repaid in |
| |
full before the issue of the shares in respect of which EIS relief is |
| |
| 40 |
(f) | provides a benefit or facility for the investor, |
| |
(g) | transfers an asset to the investor for no consideration or for |
| |
consideration less than its market value or acquires an asset from the |
| |
investor for consideration greater than its market value, or |
| |
(h) | makes to the investor any other payment except— |
| 45 |
(i) | a payment of a kind mentioned in any of the provisions of |
| |
section 168(2) (ignoring of certain payments), or |
| |
(ii) | a payment in discharge of an ordinary trade debt. |
| |
|
| |
|
| |
|
(3) | For the purposes of subsection (2)(d) the issuing company is to be treated as |
| |
having released or waived a liability if the liability is not discharged within 12 |
| |
months of the time when it ought to have been discharged. |
| |
(4) | For the purposes of subsection (2)(e) the following is to be treated as if it were |
| |
a loan made by the issuing company to the investor— |
| 5 |
(a) | the amount of any debt (other than an ordinary trade debt) incurred by |
| |
the investor to the issuing company, and |
| |
(b) | the amount of any debt due from the investor to a third party which has |
| |
been assigned to the issuing company. |
| |
(5) | The investor also receives value from the issuing company if— |
| 10 |
(a) | in respect of ordinary shares held by the investor any payment or asset |
| |
is received in a winding up or in connection with a dissolution of the |
| |
| |
(b) | the winding up or dissolution falls within section 182(4) (no tax |
| |
| 15 |
(6) | The investor also receives value from the issuing company if any person who |
| |
would, for the purposes of section 163, be treated as connected with the |
| |
| |
(a) | purchases any of its share capital or securities which belong to the |
| |
| 20 |
(b) | makes any payment to the investor for giving up any right in relation |
| |
to any of the company’s share capital or securities. |
| |
(7) | If because of the investor’s disposal of shares in a company any EIS relief |
| |
attributable to those shares is withdrawn or reduced under section 209, the |
| |
investor is not to be treated as receiving value from the company in respect of |
| 25 |
| |
(8) | The investor is not to be treated as receiving value from the issuing company |
| |
merely because of the payment to the investor, or any associate of the investor, |
| |
of any remuneration for services rendered to that company as a director if the |
| |
remuneration is reasonable remuneration. |
| 30 |
(9) | Section 167(3) (director also an employee) applies for the purposes of |
| |
subsection (8) as it applies for the purposes of section 167, and the reference in |
| |
that subsection to the payment of remuneration includes the provision of any |
| |
| |
(10) | In this section “ordinary trade debt” means any debt for goods or services |
| 35 |
supplied in the ordinary course of a trade or business if any credit given— |
| |
(a) | is for not more than 6 months, and |
| |
(b) | is not longer than that normally given to customers of the person |
| |
carrying on the trade or business. |
| |
217 | The amount of value received |
| 40 |
In a case falling within a provision listed in column 1 of the following table, the |
| |
amount of value received for the purposes of sections 213 and 218 is given by |
| |
the corresponding entry in column 2 of the table. |
| |
|
| |
|
| |
|
| | The amount of value received |
| | | | Section 216(2)(a), (b) or |
| The amount received by the investor or, if |
| | | | | greater, the market value of the shares, |
| | | | | | | | | | The amount of the liability |
| | 5 | | | The amount of the loan or advance, less the |
| | | | | amount of any repayment made before the |
| | | | | issue of the relevant shares |
| | | | | The cost to the issuing company of |
| | | | | providing the benefit or facility, less any |
| | 10 | | | consideration given for it by the investor |
| | | | | The difference between the market value of |
| | | | | the asset and the consideration (if any) |
| | | | | | | | | | The amount of the payment |
| | 15 | | | The amount of the payment or the market |
| | | | | | | | | | The amount received by the investor or, if |
| | | | | greater, the market value of the shares or |
| | | | | | | 20 |
|
218 | Value received where there is more than one issue of shares |
| |
(1) | This section applies if— |
| |
(a) | two or more issues of shares in the issuing company have been made to |
| |
the investor which include shares in respect of which the investor |
| |
| 25 |
(b) | value is received by the investor at any time in the applicable periods |
| |
for two or more of those issues. |
| |
(2) | Section 213(2) has effect in relation to the shares included in each of the issues |
| |
referred to in subsection (1)(b) as if the amount of value referred to as “R” were |
| |
reduced by multiplying it by the fraction—![equation: over[char[A],char[B]]](missing.gif) |
| 30 |
| |
| |
A is the amount on which the investor obtains EIS relief in respect of the |
| |
shares included in the issue in question, and |
| |
B is the sum of that amount and the corresponding amount or amounts in |
| 35 |
respect of the other issue or issues. |
| |
|
| |
|
| |
|
(3) | For the purposes of subsection (1) “the applicable period” for an issue of shares |
| |
is period C in relation to those shares. |
| |
219 | Value received where part of share issue treated as made in previous tax year |
| |
(1) | This section applies if— |
| |
(a) | section 213(2) applies to an issue of shares, and |
| 5 |
(b) | section 158(1) and (2) (form and amount of EIS relief) applies in the case |
| |
of that issue as if part of the issue had been issued in a previous tax year. |
| |
(2) | This subsection explains how the calculation under section 213(2) is to be |
| |
| |
| 10 |
| Apportion the amount referred to as “R” between the tax year in which the |
| |
shares were issued and the previous tax year by multiplying that amount by |
| |
the fraction—![equation: over[char[A],char[B]]](missing.gif) |
| |
| |
A is the amount on which the investor obtains EIS relief in respect of the |
| 15 |
shares treated as issued in the tax year in question, and |
| |
B is the sum of that amount and the corresponding amount in respect of |
| |
the shares treated as issued in the other tax year. |
| |
| |
| In relation to each of the amounts (“R1” and “R2”) so apportioned to the two |
| 20 |
tax years, calculate the amounts (“X1” and “X2”) that would be given by the |
| |
formula if there were separate issues of shares in those tax years. |
| |
| In calculating amounts X1 and X2, apply section 220 if appropriate but do not |
| |
| |
| 25 |
| Add amounts X1 and X2 together. |
| |
| The result is the required amount. |
| |
220 | Cases where maximum EIS relief not obtained |
| |
(1) | If the investor’s liability to income tax is reduced for any tax year in respect of |
| |
| 30 |
(a) | the amount of the reduction (“A”), is less than |
| |
(b) | the amount (“B”) which is equal to income tax at the savings rate for |
| |
that year on the amount on which the investor claims EIS relief in |
| |
| |
|
| |
|