Finance Act 1994

17 In section 303 (value received by persons other than claimants)—

(a) for subsection (1) there is substituted—

“(1) Where any relief is attributable to any shares in a company held by an individual, subsection (1A) below shall apply if at any time in the relevant period the company or any subsidiary repays, redeems or repurchases any of its share capital which belongs to any member other than—

(a) that individual, or

(b) another individual the relief attributable to whose shares in the company is thereby withdrawn or reduced by virtue of section 299 or 300(2)(a),

or makes any payment to any such member for giving up his right to any of the share capital of the company or subsidiary on its cancellation or extinguishment.

(1A) The relief—

(a) if it is greater than the amount mentioned in subsection (1B) below, shall be reduced by that amount, and

(b) if paragraph (a) above does not apply, shall be withdrawn.

(1B) The amount referred to in subsection (1A) above is an amount equal to tax at the lower rate for the year of assessment for which the relief was given on the amount receivable by the member or, if greater, the nominal value of the share capital in question; and section 299(4) above applies for the purposes of this subsection as it applies for the purposes of subsection (2) of that section”,

(b) in subsection (3), for “291(4)” there is substituted “ 291B(1) ” and for “291” there is substituted “ 291B ”,

(c) after subsection (6) there is inserted—

“(6A) The reference in subsection (3) above to the receipt of value from a company includes the receipt of value from a subsidiary, and the reference to the company in subsection (6) above shall be read accordingly”,

(d) subsection (8) is omitted,

(e) after subsection (9) there is inserted—

“(9A) References in this section to a subsidiary of a company are references to a 51 per cent. subsidiary of the company, whether it becomes such a subsidiary before or after the redemption, repayment, repurchase or payment in question or, as the case may be, the receipt of value in question.

(9B) Section 312(1A)(a) applies to determine the relevant period for the purposes of this section”, and

(f) subsections (10) and (11) are omitted.