Textual Amendments
F1Pt. 7 Ch. 3 heading substituted (with effect in accordance with s. 137(2) of the amending Act) by Finance Act 1994 (c. 9), s. 137(1), Sch. 15 para. 2
Modifications etc. (not altering text)
C1Pt. 7 Ch. 3 applied (with effect in accordance with Sch. 13 para. 4(4) of the 1995 amending Act) by Taxation of Chargeable Gains Act 1992 (c. 12), Sch. 5B para. 6(4) (as inserted by Finance Act 1995 (c. 4), Sch. 13 para. 4(3))
[F2(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(b)another individual the relief attributable to whose shares in the company is thereby withdrawn or reduced by virtue of section 299 or 300(2)(a),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(b)if paragraph (a) above does not apply, shall be withdrawn.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.]
(2)M1Where subsection (1) above applies, the amount of relief to which an individual is entitled shall be reduced by the amount receivable by the member or, if greater, the nominal value of the share capital in question; and where, apart from this subsection, two or more individuals would be entitled to relief the reduction shall be made in proportion to the amounts of relief to which they would, apart from this subsection, have been entitled.
(3)Where at any time in the relevant period a member of a company receives or is entitled to receive any value from the company within the meaning of this subsection, then, for the purposes of section [F3291B(1)] in its application to any subsequent time—
(a)the amount of the company’s issued ordinary share capital; and
(b)the amount of the part of that capital which consists of the shares which (within the meaning of section [F3291]) the individual directly or indirectly possesses or is entitled to acquire, and the amount of the part consisting of the remainder,
shall each be treated as reduced in accordance with subsection (4) below.
(4)The amount of each of the parts mentioned in subsection (3)(b) above shall be treated as equal to such proportion of that amount as the amount subscribed for that part less the relevant value bears to the amount subscribed; and the amount of the issued share capital shall be treated as equal to the sum of the amounts treated under this subsection as the amount of those parts respectively.
(5)In subsection (4) above “the relevant value”, in relation to each of the parts there mentioned, means the value received by the member or members entitled to the shares of which that part consists.
(6)For the purposes of subsection (3) above a member of a company receives or is entitled to receive value from the company in any case in which an individual would receive value from the company by virtue of section 300(2)(d), (e), (f), (g) or (h) (but treating as excepted from paragraph (h) all payments made for full consideration) and the value received shall be determined as for the purposes of that section.
[F4(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.]
(7)For the purposes of subsection (6) above a person shall be treated as entitled to receive anything which he is entitled to receive at a future date or will at a future date be entitled to receive.
(8)F5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9)Where—
(a)a company issues share capital (“”) of nominal value equal to the authorised minimum (within the meaning of the M2Companies Act 1985) for the purposes of complying with the requirements of section 117 of that Act (public company not to do business unless requirements as to share capital complied with); and
(b)after the registrar of companies has issued the company with a certificate under section 117, it issues eligible shares;
subsection (1) above shall not apply in relation to any redemption of any of the original shares within 12 months of the date on which those shares were issued.
In relation to companies incorporated under the law of Northern Ireland references in this subsection to the Companies Act 1985 and to section 117 of that Act shall have effect as references to the M3Companies (Northern Ireland) Order 1986 and to Article 127 of that Order.
[F6(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.]
(10)F7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(11)F7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F2S. 303(1)-(1B) substituted for s. 303(01) (with effect as mentioned in s. 137(1)(2) of the amending Act) by Finance Act 1994 (c. 9), Sch. 15 para. 17(a)
F3Word in s. 303(3) substituted (with effect as mentioned in s. 137(1)(2) of the amending Act) by Finance Act 1994 (c. 9), Sch. 15 para. 17(b)
F4S. 303(6A) inserted (with effect as mentioned in s. 137(1)(2) of the amending Act) by Finance Act 1994 (c. 9), Sch. 15 para. 17(c)
F5S. 303(8) repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by Finance Act 1994 (c. 9), Sch. 15 para. 17(d), Sch. 26 Pt. 5(17)
F6S. 303(9A)(9B) inserted (with effect as mentioned in s. 137(1)(2) of the amending Act) by Finance Act 1994 (c. 9), Sch. 15 para. 17(e)
F7S. 303(10)(11) repealed (with effect as mentioned in s. 137(1)(2), Sch. 26 Pt. 5(17) Note of the repealing Act) by Finance Act 1994 (c. 9), Sch. 15 para. 17(f), Sch. 26 Pt. 5(17)
Marginal Citations
M1Source-1981 s.59(3)-(8); 1983 Sch.5 10(2)