PART VII GENERAL PROVISIONS RELATING TO TAXATION OF INCOME OF INDIVIDUALS

CHAPTER IIIENTERPRISE INVESTMENT SCHEME

292 Parallel trades. F1

M1(1)

F2An individual is not eligible for relief in respect of any shares in a company if, at the date mentioned in subsection (2) below—

(a)

he is one of a group of persons—

(i)

who control the company; or

(ii)

to whom belongs an interest amounting in the aggregate to more than a half share in the trade carried on by the company;

(b)

he is also an individual, or one of a group of persons—

(i)

controlling another company; or

(ii)

to whom belongs an interest amounting in the aggregate to more than a half share in another trade; and

(c)

the trade carried on by the company, or a substantial part of it—

(i)

is concerned with the same or similar types of property or parts thereof or provides the same or similar services or facilities; and

(ii)

serves substantially the same or similar outlets or markets;

as the other trade or (as the case may be) the trade carried on by the other company.

(2)

The date mentioned in subsection (1) above is—

(a)

the date on which the shares are issued; or

(b)

if later, the date on which the company begins to carry on the trade.

(3)

For the purposes of subsection (1) above—

(a)

the persons to whom a trade belongs, and (where a trade belongs to two or more persons) their respective shares in that trade, shall be determined in accordance with section 344(1)(a) and (b), (2) and (3); and

(b)

any interest, rights or powers of a person who is an associate of another person shall be treated as those of that other person.

(4)

For the purposes of this section—

(a)

references to a company’s trade include references to the trade of F3any company which is a 51 per cent. subsidiary of that company on the date referred to in subsection (2) above; and

(b)

“trade” in the expressions “another trade”, “other trade” and “trade carried on by the other company” includes any business, profession or vocation.

F4(5)

This section shall not apply where the shares mentioned in subsection (1) above are issued on or after 29th November 1994.