PART VII GENERAL PROVISIONS RELATING TO TAXATION OF INCOME OF INDIVIDUALS
C4CHAPTER III RELIEF FOR INVESTMENT IN CORPORATE TRADES: THE BUSINESS EXPANSION SCHEME
302 Replacement capital.
M11
An individual is not entitled to relief in respect of any shares in a company where—
C1a
at any time in the relevant period, the company or any of its subsidiaries—
i
begins to carry on as its trade or as part of its trade a trade which was previously carried on at any time in that period otherwise than by the company or any of its subsidiaries; or
ii
acquires the whole, or greater part, of the assets used for the purposes of a trade previously so carried on; and
b
subsection (2) below applies in relation to that individual.
2
This subsection applies in relation to an individual where—
C1a
any person or group of persons to whom an interest amounting in the aggregate to more than a half share in the trade (as previously carried on) belonged, at any time in the relevant period, is or are a person or group of persons to whom such an interest in the trade carried on by the company belongs or has, at any such time, belonged; or
C1b
any person or group of persons who control or, at any such time, have controlled the company is or are a person or group of persons who, at any such time, controlled another company which previously carried on the trade;
and the individual is that person or one of those persons.
3
An individual is not entitled to relief in respect of any shares in a company where—
a
the company comes to acquire all of the issued share capital of another company, at any time in the relevant period; and
b
any person or group of persons who control or have, at any such time, controlled the company is or are a person or group of persons who, at any such time, controlled that other company;
and that individual is that person or one of those persons.
C24
For the purposes of subsection (2) 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.
5
In this section—
“subsidiary” means a subsidiary of a kind which a qualifying company may have by virtue of sections 308 and 309; and
C3“trade” includes any business, profession or vocation, and references to a trade previously carried on include references to part of such a trade.
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.