PART VII GENERAL PROVISIONS RELATING TO TAXATION OF INCOME OF INDIVIDUALS
C1CHAPTER III RELIEF FOR INVESTMENT IN CORPORATE TRADES: THE BUSINESS EXPANSION SCHEME
300 Value received from company.
1
M1Subject to section 299, where an individual who subscribes for eligible shares in a company—
a
has, before the issue of the shares but within the relevant period, received any value from the company; or
b
after their issue but before the end of the relevant period, receives any such value;
the amount of the relief to which he is entitled in respect of the shares shall be reduced by the value received; but the value received shall be disregarded to the extent to which relief under Schedule 5 to the Finance Act 1983 or under this Chapter has been reduced on its account.
2
M2For the purposes of this section an individual receives value from the company if the company—
a
repays, redeems or repurchases any of its share capital or securities which belong to the individual or makes any payment to him for giving up his right to any of the company’s share capital or any security on its cancellation or extinguishment;
b
repays any debt owed to the individual other than a debt which was incurred by the company—
i
on or after the date on which he subscribed for the shares in respect of which the relief is claimed; and
ii
otherwise than in consideration of the extinguishment of a debt incurred before that date;
c
makes to the individual any payment for giving up his right to any debt (other than a debt in respect of a payment of the kind mentioned in section 291(3)(a) or (e) or an ordinary trade debt) on its extinguishment;
d
releases or waives any liability of the individual to the company or discharges, or undertakes to discharge, any liability of his to a third person;
e
makes a loan or advance to the individual which has not been repaid in full before the issue of the shares in respect of which relief is claimed;
f
provides a benefit or facility for the individual;
g
transfers an asset to the individual for no consideration or for consideration less than its market value or acquires an asset from him for consideration exceeding its market value; or
h
makes to him any other payment except a payment of the kind mentioned in section 291(3)(a), (b), (c), (d) or (e) or a payment in discharge of an ordinary trade debt.
3
For the purposes of this section an individual also receives value from the company if he receives in respect of ordinary shares held by him any payment or asset in a winding up or in connection with a dissolution of the company, being a winding up or dissolution falling within section 293(6).
4
The value received by an individual is—
a
in a case within paragraph (a), (b) or (c) of subsection (2) above, the amount receivable by the individual or, if greater, the market value of the shares, securities or debt in question;
b
in a case within paragraph (d) of that subsection, the amount of the liability;
c
in a case within paragraph (e) of that subsection, the amount of the loan or advance reduced by the amount of any repayment made before the issue of the shares in respect of which relief is claimed;
d
in a case within paragraph (f) of that subsection, the cost to the company of providing the benefit or facility less any consideration given for it by the individual;
e
in a case within paragraph (g) of that subsection, the difference between the market value of the asset and the consideration (if any) given for it;
f
in a case within paragraph (h) of that subsection, the amount of the payment; and
g
in a case within subsection (3) above, the amount of the payment or, as the case may be, the market value of the asset.
5
M3For the purposes of this section an individual also receives value from the company if any person who would, for the purposes of section 291, be treated as connected with the company—
a
purchases any of its share capital or securities which belong to the individual; or
b
makes any payment to him for giving up any right in relation to any of the company’s share capital or securities;
and the value received by the individual is the amount receivable by the individual or, if greater, the market value of the shares or securities in question.
See—s.360(3A)—exclusion of relief for interest on loan to purchase close company shares if BES relief claimed.1988(F) ss.50-53and Sch.4for changes applicable in respect of shares issued on or after 29July 1988and before the end of 1993in respect of private rented housing.