Finance Act 1988

50 Private rented housing

(1) Where eligible shares in a company are issued for the purpose of raising money for qualifying activities—

(a) which are being carried on by the company or any of its subsidiaries; or

(b) which the company or any of its subsidiaries intends to carry on,

Chapter III of Part VII of the Taxes Act 1988 (relief for investment in new corporate trades: the business expansion scheme) shall apply in relation to the company with the modifications set out in Part I of Schedule 4 to this Act.

(2) In this section and Chapter III (as so modified) “qualifying activities”, in relation to a company by which eligible shares are issued or any subsidiary of such a company, means activities which—

(a) consist of or are connected with the provision and maintenance of dwelling-houses to which this section applies which the company or subsidiary lets, or intends to let, on qualifying tenancies; and

(b) are, during the period beginning with the date on which the shares are issued and ending four years after that date, conducted on a commercial basis and with a view to the realisation of profits.

(3) This section applies to any dwelling-house which is not precluded from being a dwelling-house to which this section applies by Part II of Schedule 4 to this Act; and in this section and that Part of that Schedule—

(a) references to a company or subsidiary do not include references to a company or subsidiary which is a registered housing association within the meaning of the [1985 c. 69.] Housing Associations Act 1985 or Part VII of the [S.I. 1981/156 (N.I.3).] Housing (Northern Ireland) Order 1981;

(b) “qualifying tenancy” means any tenancy which is—

(i) for the purposes of the Housing Act 1988, an assured tenancy other than an assured shorthold tenancy;

(ii) for the purposes of the Housing (Scotland) Act 1988, an assured tenancy other than a short assured tenancy; or

(iii) in Northern Ireland, a tenancy which complies with such requirements or conditions as may be prescribed by regulations made by the Department of the Environment for Northern Ireland,

and is not a tenancy which falls within subsection (4) below; and

(c) expressions which are also used in Chapter III have the same meanings as in that Chapter.

(4) A tenancy falls within this subsection if—

(a) it is a tenancy granted in consideration of a premium within the meaning of Schedule 3 to the [1979 c. 14.] Capital Gains Tax Act 1979; or

(b) any option to purchase in relation to the dwelling-house has been granted to the tenant or an associate of his;

and in this subsection any reference to the tenant includes, in the case of a joint tenancy, a reference to either or any of the joint tenants.

(5) Regulations under subsection (3) above shall be made by statutory rule for the purposes of the [S.I. 1979/1573 (N.I.12).] Statutory Rules (Northern Ireland) Order 1979 and shall be subject to negative resolution within the meaning of section 41(6) of the [1954 c. 33 (N.I.).] Interpretation Act (Northern Ireland) 1954.

(6) This section and Schedule 4 to this Act shall have effect in relation to shares issued after the passing of this Act and before the end of 1993.