SCHEDULES

SCHEDULE 20Corporate venturing scheme

Section 95

1

Schedule 15 to the Finance Act 2000 (c. 17) (the corporate venturing scheme) is amended as follows.

2

In paragraph 3 (meaning of “the qualification period”)—

a

in sub-paragraph (1)(b)(ii), and

b

in sub-paragraph (2)(a) and (b),

for “qualifying subsidiaries” substitute “ qualifying 90% subsidiaries ”.

3

In paragraph 15 (introduction) after paragraph (e) insert—

ea

property managing subsidiaries (see paragraph 21A);

4

In paragraph 20 (the qualifying subsidiaries requirement) for sub-paragraph (2) substitute—

2

In this paragraph “subsidiary” means any company which the company controls, either on its own or together with any person connected with it.

3

For the purpose of sub-paragraph (2), the question whether a person controls a company shall be determined in accordance with section 416(2) to (6) of the Taxes Act 1988.

5

1

Paragraph 21 (meaning of “qualifying subsidiary”) is amended as follows.

2

In sub-paragraph (2)—

a

omit paragraphs (a) to (c),

b

before paragraph (d) insert—

ca

the subsidiary is a 51% subsidiary of the relevant company;

c

in paragraph (e) for “the conditions in paragraphs (a) to” substitute “ either of the conditions in paragraphs (ca) and ”.

3

In sub-paragraph (4)(a)(ii), after “company” insert “ concerned ”.

4

In sub-paragraph (5)—

a

after “qualifying subsidiary” insert “ of the relevant company ”,

b

for “and not part” substitute “ and is not to be part ”.

6

After paragraph 21 insert—

The property managing subsidiaries requirement

21A

1

The issuing company is not a qualifying issuing company in relation to the relevant shares if, at any time during the qualification period relating to those shares, it has a property managing subsidiary which is not a qualifying 90% subsidiary of the issuing company (see paragraph 23(10) and (11)).

2

“Property managing subsidiary” means a qualifying subsidiary of the issuing company whose business consists wholly or mainly in the holding or managing of land or any property deriving its value from land.

3

In sub-paragraph (2), “land” and “property deriving its value from land” have the same meaning as in section 776 of the Taxes Act 1988.

7

In paragraph 23 (the trading activities requirement)—

a

in sub-paragraph (3)(b), for “at least one group company” substitute “ the issuing company or a qualifying 90% subsidiary of the issuing company ”,

b

in sub-paragraph (5)—

i

for “a subsidiary” substitute “ a qualifying 90% subsidiary of the issuing company ”,

ii

for “or subsidiary” substitute “ or a qualifying 90% subsidiary of the issuing company ”,

c

in sub-paragraph (6), for “the company”, in the first place, substitute “ a company ”,

F1d

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8

In paragraph 24 (ceasing to meet trading requirements by reason of administration, receivership etc)—

a

in sub-paragraph (1)—

i

omit “which is in administration or receivership”,

ii

after “by reason” insert “ only ”,

b

in sub-paragraph (2)(b), after “company” insert “ concerned ”,

c

in sub-paragraph (4)—

i

in paragraph (a), for “of the company or any of its subsidiaries” substitute “ only of the company or any of its qualifying subsidiaries ”,

ii

in paragraph (b), for “and not” substitute “ and is not ”.

9

In paragraph 25 (meaning of “qualifying trade”) in sub-paragraph (3)(b), for “any other group company” substitute “ the issuing company or any of its qualifying 90% subsidiaries ”.

10

In paragraph 35 (requirement as to the shares) in sub-paragraph (2), for “the issuing company at a future date” substitute “ any person at a future date in respect of the acquisition of the shares ”.

11

In paragraph 36 (requirement as to money raised)—

a

in sub-paragraph (1B)(b)—

i

for “relevant trade was not being carried on” substitute “ issuing company or a qualifying 90% subsidiary of that company had not begun to carry on the relevant trade ”,

ii

for “subsidiary” substitute “ qualifying 90% subsidiary of that company ”,

b

in sub-paragraphs (4)(b)(ii) and (5)(b), for “qualifying subsidiary” substitute “ qualifying 90% subsidiary ”.

12

In paragraph 40 (entitlement to claim)—

a

in sub-paragraph (2), for paragraph (a) substitute—

a

the funded trade has been carried on for four months by no person other than the issuing company or a qualifying 90% subsidiary of that company, disregarding—

i

any time spent preparing to carry on that trade, and

ii

any person required to be disregarded in accordance with sub-paragraph (2A) or (2B), and

b

after sub-paragraph (2) insert—

2A

At any time when the funded trade is carried on by the partners in a partnership of which the issuing company, or a qualifying 90% subsidiary of that company, is a member, there shall be disregarded for the purposes of sub-paragraph (2)(a) any other members of the partnership at that time.

2B

At any time when the funded trade is carried on by the parties to a joint venture to which the issuing company, or a qualifying 90% subsidiary of that company, is a party, there shall be disregarded for the purposes of sub-paragraph (2)(a) any other parties to the joint venture at that time.

c

for sub-paragraph (5)(a) substitute—

a

by reason only of the issuing company or any other company being wound up or dissolved without winding up, the funded trade is carried on as mentioned in sub-paragraph (2)(a) for a period shorter than four months, and

d

in sub-paragraph (5)(b), for “was”, in each place, substitute “ is ”,

e

for sub-paragraph (6)(a) substitute—

a

by reason only of anything done as a consequence of the issuing company or any other company being in administration or receivership, the funded trade is carried on as mentioned in sub-paragraph (2)(a) for a period shorter than four months, and

f

in sub-paragraph (6)(b), after “company” insert “ concerned ”.

13

In paragraph 102 (minor definitions etc) after sub-paragraph (7) insert—

8

In determining for the purposes of paragraph 3(2), 23(5) or 36(1B) when a trade is begun to be carried on by a qualifying 90% subsidiary of the issuing company there shall be disregarded any carrying on of the trade by it before it became such a subsidiary.

14

In paragraph 103 (index of defined expressions), after the entry for “qualifying subsidiary” insert—

qualifying 90% subsidiary

paragraph 23(10) and (11)

15

The amendments made by this Schedule have effect in relation to shares issued on or after 17th March 2004.