Income Tax Act 2007

176 The minimum period requirement U.K.

(1) The issue of shares which includes the relevant shares must meet—

(a) the requirement of subsection (2) in a case where the money raised by an issue of shares is raised wholly for the purpose of a qualifying business activity falling within section 179(2),

(b) the requirement of subsection (3) in a case where the money raised by an issue of shares is raised wholly or partly for the purpose of a qualifying business activity falling within section 179(4).

(2) The requirement is that—

(a) the trade concerned must have been carried on for a period of at least 4 months ending at or after the time of the issue, and

(b) throughout that period—

(i) the trade must have been carried on by the issuing company or a qualifying 90% subsidiary of that company, and

(ii) the trade must not have been carried on by any other person.

(3) The requirement is that—

(a) the research and development concerned must have been carried on for a period of at least 4 months ending at or after the time of the issue, and

(b) throughout that period—

(i) the research and development must have been carried on by the issuing company or a qualifying 90% subsidiary of that company, and

(ii) the research and development must not have been carried on by any other person.

(4) If—

(a) merely because of the issuing company or any other company being wound up, or dissolved without winding up—

(i) the trade is carried on as mentioned in subsection (2), or

(ii) the research and development is carried on as mentioned in subsection (3),

for a period shorter than 4 months, and

(b) the winding up or dissolution—

(i) is for genuine commercial reasons, and

(ii) is not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax,

subsection (2) or, as the case may be, (3) has effect as if it referred to that shorter period.

(5) If—

(a) merely because of anything done as a result of the issuing company or any other company being in administration or receivership—

(i) the trade is carried on as mentioned in subsection (2), or

(ii) the research and development is carried on as mentioned in subsection (3),

for a period shorter than 4 months, and

(b) the entry into administration or receivership, and everything done as a result of the company concerned being in administration or receivership—

(i) is for genuine commercial reasons, and

(ii) is not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax,

subsection (2) or, as the case may be, (3) has effect as if it referred to that shorter period.