there would (apart from paragraph 2(2)(a) below) be a chargeable gain (“the original gain”) accruing to an individual (“the investor”) at any time (“the accrual time”) on or after 29th November 1994;

the gain is one accruing either on the disposal by the investor of any asset or in accordance with F2section 164F or 164FA,F147section 169N, paragraphs 4 and 5 below or paragraphs 4 and 5 of Schedule 5C;

the investor makes a qualifying investment; and

the investor is resident F169... in the United Kingdom at the accrual time and the time when he makes the qualifying investment and is not, in relation to the qualifying investment, a person to whom sub-paragraph (4) below applies.

eligible shares in a company for which he has subscribed F66... are issued to him at a qualifying time and, where that time is before the accrual time, the shares are still held by the investor at the accrual time,

he subscribed for the shares (other than any of them which are bonus shares) wholly in cash,

the company is a qualifying company in relation to the shares,

at the time when they are issued the shares F68(other than any of them which are bonus shares) are fully paid up,

the shares are subscribed for, and issued, for bona fide commercial purposes and not as part of arrangements the main purpose or one of the main purposes of which is the avoidance of tax,

the total amount of relevant investments made in the company in the year ending with the date the shares are issued does not exceed F168£5 million,

the requirements of section 289(1A) of the Taxes Act F69(read with section 289(1B) to (1E) of that Act)F100, or the requirements of section 183 of ITA 2007, are satisfied in relation to the company,

F70the shares (other than any of them which are bonus shares) are issued in order to raise money for the purpose of a qualifying business activity, F148and

all of the money raised by the issue of the shares (other than any of them which are bonus shares) is, no later than the time mentioned in section 175(3) of ITA 2007, employed wholly for the purpose of that activity,

any time in the period beginning one year before and ending three years after the accrual time, or

any such time before the beginning of that period or after it ends as the Board may by notice allow.

though resident F170... in the United Kingdom at the time when he makes the investment, he is regarded for the purposes of any double taxation relief arrangements as resident in a territory outside the United Kingdom, and

were section 150A to be disregarded, the arrangements would have the effect that he would not be liable in the United Kingdom to tax on a gain arising on a disposal, immediately after their acquisition, of the shares acquired in making that investment.

if the claim under this Schedule is made after the time mentioned in F151section 175(3) of ITA 2007, as never having been eligible shares; and

if that claim is made before that time, as ceasing to be eligible shares at that time.

the company has given notice under paragraph 16(2) or (4) belowF101, section 310(2) of the Taxes Act or section 241(3) of ITA 2007; or

an inspector has given notice to the company stating that, by reason of the matter mentioned in that sub-paragraph, the shares F76mentioned in paragraph 1(2)(a) above should, in his opinion, be treated for the purposes of this Schedule as never having been or, as the case may be, as ceasing to be eligible shares.

is specified in the claim, and

does not exceed so much of the original gain as is unmatched,

so much of that gain as is equal to that amount shall be treated as not having accrued at the accrual time; but

paragraphs 4 and 5 below shall apply for determining the gain that is to be treated as accruing on the occurrence of any chargeable event in relation to any of F19the relevant shares.

the investor’s qualifying expenditure on F18the relevant shares is the amount subscribed by him for the shares; and

that expenditure is unused to the extent that it has not already been set under this Schedule F161or paragraph 1(5) of Schedule 5BB against the whole or any part of a chargeable gain.

the investor disposes of those shares otherwise than by way of a disposal within marriage F93or civil partnership;

those shares are disposed of, otherwise than by way of a disposal to the investor, by a person who acquired them on a disposal made by the investor within marriage F93or civil partnership;

the investor becomes a non-resident while holding those shares and F39before the termination date relating to those shares;

a person who acquired those shares on a disposal within marriage F93or civil partnership becomes a non-resident while holding those shares and F39before the termination date relating to those shares; F9or

those shares cease (or are treated for the purposes of this Schedule as ceasing) to be eligible shares.

the reason why the person in question becomes a non-resident is that he works in an employment or office all the duties of which are performed outside the United Kingdom, and

he again becomes resident F171... in the United Kingdom within the period of three years from the time when he became a non-resident, without having meanwhile disposed of any of those shares;

the investor or a person who has acquired F21any of the relevant shares on a disposal within marriage F93or civil partnership dies, and

an event occurs at or after the time of the death which (apart from this sub-paragraph) would be a chargeable event in relation to F21any of the relevant shares held by the deceased immediately before his death,

a chargeable gain shall be treated as accruing at the time of the event; and

the amount of the gain shall be equal to so much of the deferred gain as is attributable to the shares in relation to which the chargeable event occurs.

first any to which neither deferral relief nor relief under Chapter III of Part VII of the Taxes Act F103or Part 5 of ITA 2007 is attributable;

next any to which deferral relief, but not relief under that Chapter F103or that Part, is attributable;

next any to which relief under that Chapter F103or that Part, but not deferral relief, is attributable; and

finally any to which both deferral relief and relief under that Chapter F103or that Part are attributable.

any shares to which deferral relief, but not relief under Chapter III of Part VII of the Taxes Act F104or Part 5 of ITA 2007, is attributable and which were disposed of to an individual by a disposal within marriage F94or civil partnership, and

any shares to which relief under that Chapter F104or that Part is attributable and which were transferred to an individual as mentioned in section 304 of F105the Taxes Act or section 245 of ITA 2007,

so much of the deferred gain as is attributable to those shares shall be treated, in determining for the purposes of this paragraph the amount of the deferred gain to be treated as attributable to each of those assets, as apportioned in such manner as may be just and reasonable between those assets; and

as between different assets treated as representing F27the same shares, F13sub-paragraphs (3) to (4A) above shall apply with the necessary modifications in relation to those assets as they would apply in relation to the shares.

the amount of the original gain against which expenditure has been set under this Schedule, less

the amount of any gain treated as accruing under this paragraph previously as a result of a disposal of any of the relevant shares.

to the person who makes the disposal,

to the person who becomes a non-resident, F14or

to the person who holds the shares in question when they cease (or are treated for the purposes of this Schedule as ceasing) to be eligible shares.

sub-paragraph (1) above provides for the holding of shares at a particular time to be what identifies the person to whom any chargeable gain accrues, and

at that time, some of those shares are held by the investor and others are held by a person to whom the investor has transferred them by a disposal within marriage F95or civil partnership,

any reference to the conditions for the relief were a reference to the conditions for the application of this Schedule;

in subsection (1), the words “(or treated by section 289B(5) as so issued)" were omitted; and

subsections (7) to (9) were omitted.

shares to which deferral relief and relief under Chapter III of Part VII of the Taxes Act F111or Part 5 of ITA 2007 are attributable,

shares to which deferral relief but not relief under that Chapter F112or that Part is attributable, and

shares to which deferral relief is not attributable,

an individual holds shares (“the existing holding") which form part of the ordinary share capital of a company,

there is, by virtue of any such allotment for payment as is mentioned in section 126(2)(a), a reorganisation affecting the existing holding, and

immediately following the reorganisation, the existing holding or the allotted shares are shares to which deferral relief is attributable,

a company (“the new company") in which the only issued shares are subscriber shares acquires all the shares (“old shares") in another company (“the old company");

the consideration for the old shares consists wholly of the issue of shares (“new shares") in the new company;

the consideration for new shares of each description consists wholly of old shares of the corresponding description;

new shares of each description are issued to the holders of old shares of the corresponding description in respect of and in proportion to their holdings;

by virtue of section 127 as applied by section 135(3), the exchange of shares is not treated as involving a disposal of the old shares or an acquisition of the new shares.

the new shares had been subscribed for by him at the time when, and for the amount for which, the old shares were subscribed for by him;

the new shares had been issued to him by the new company at the time when the old shares were issued to him by the old company; and

the claim under this Schedule made in respect of the old shares had been made in respect of the new shares.

the new shares had been subscribed for at the time when, and for the amount for which, the old shares were subscribed for;

the new shares had been issued by the new company at the time when the old shares were issued by the old company; and

the claim under this Schedule made in respect of the old shares had been made in respect of the new shares.

this Schedule shall have effect as if anything which, under paragraph 1A(5) above, paragraph 16 below or section 306(2) of the Taxes Act F114or section 203(1) of ITA 2007 as applied by paragraph 6 above has been done, or is required to be done, by or in relation to the old company had been done, or were required to be done, by or in relation to the new company; and

any appeal brought by the old company against a notice under paragraph 1A(5)(b) may be prosecuted by the new company as if it had been brought by that company.

the new holding consists of new ordinary shares (“the new shares") carrying no present or future preferential right to dividends or to a company’s assets on its winding up and no present or future right to be redeemed,

the new shares are issued after the end of the relevant period, and

the condition in sub-paragraph (4) below is satisfied.

the company issuing them issued eligible shares, and

a certificate in relation to those eligible shares was issued by the company for the purposes of F116section 306(2) of the Taxes Act or section 203(1) of ITA 2007 (as applied by paragraph 6 above) and in accordance with F116section 306 of the Taxes Act or sections 204 and 205 of ITA 2007 (as so applied).

is the company in which the initial holding subsisted; or

is a company that was, at the time of the disposal of the initial holding, or is, at the time of the issue of the eligible shares, a member of the same group of companies as the company in which the initial holding subsisted.

any eligible shares in a qualifying company (“the acquired holding") are issued to an individual,

an amount of qualifying expenditure on those shares has been set under this Schedule against the whole or part of any chargeable gain (the “postponed gain"), and

after the issue of those shares, eligible shares in a relevant company are issued to him,

where that individual has disposed of any of the acquired holding, it is the company in which the acquired holding has subsisted or a company which was a member of the same group of companies as that company at any time since the acquisition of the acquired holding;

it is a company in relation to the disposal of any shares in which there has been a claim under this Schedule such that, without that claim, there would have been no postponed gain in relation to the acquired holding; or

it is a company which, at the time of the disposal or acquisition to which the claim relates, was a member of the same group of companies as a company falling within paragraph (b) above.

arrangements with a view to the subsequent repurchase, exchange or other disposal of the shares or of other shares in or securities of the same company;

arrangements for or with a view to the cessation of any trade which is being or is to be or may be carried on by the company or a person connected with the company;

arrangements for the disposal of, or of a substantial amount of, the assets of the company or of a person connected with the company;

arrangements the main purpose of which, or one of the main purposes of which, is (by means of any insurance, indemnity or guarantee or otherwise) to provide partial or complete protection for persons investing in shares in that company against what would otherwise be the risks attached to making the investment.

the relevant arrangements include arrangements for the company to be wound up; or

the company is wound up otherwise than for bona fide commercial reasons.

for the company itself, or

in the case of a company which is a parent company of a trading group, for the company itself, for the company itself and one or more of its subsidiaries or for one or more of its subsidiaries,

shall be construed in accordance with the provision contained for the purposes of section 293 of the Taxes Act in that sectionF118, or

is a reference to a company that meets the trading requirement in section 181(2)(b) of ITA 2007.

the arrangements under which the shares are issued to the individual; and

any arrangements made before the issue of the shares to him in relation to or in connection with that issue.

that activity is the relevant qualifying business activity, and

one or both of conditions A and B are met.

an option, the exercise of which would bind the grantor to purchase such shares, is granted to the individual during the relevant period; or

an option, the exercise of which would bind the individual to sell such shares, is granted by the individual during the relevant period.

if the option is granted on or before the date of the issue of the shares, as never having been eligible shares; and

if the option is granted after that date, as ceasing to be eligible shares on the date when the option is granted.

the option were exercised immediately after the grant, and

any shares in the company acquired by the individual after the grant were disposed of immediately after being acquired,

if the individual receives the value on or before the date of the issue of the shares, as never having been eligible shares; and

if the individual receives the value after that date, as ceasing to be eligible shares on the date when the value is received.

the individual who subscribes for the shares receives value (“the relevant receipt”) from the company during the period of restriction,

the aggregate amount of the value of the receipts within paragraphs (a) and (b) above is not an amount of insignificant value,

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;

makes to the individual any payment for giving up his right to any debt on its extinguishment;

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;

makes a loan or advance to the individual which has not been repaid in full before the issue of the shares;

provides a benefit or facility for the individual;

disposes of an asset to the individual for no consideration or for a consideration which is or the value of which is less than the market value of the asset;

acquires an asset from the individual for a consideration which is or the value of which is more than the market value of the asset; or

makes any payment to the individual other than a qualifying payment.

the amount of any debt (other than an ordinary trade debt) incurred by the individual to the company; and

the amount of any debt due from the individual to a third person which has been assigned to the company.

purchases any of its share capital or securities which belong to the individual; or

makes any payment to him for giving up any right in relation to any of the company’s share capital or securities.

the payment by any company of such remuneration for service as an officer or employee of that company as may be reasonable in relation to the duties of that office or employment;

any payment or reimbursement by any company of travelling or other expenses wholly, exclusively and necessarily incurred by the individual to whom the payment is made in the performance of duties as an officer or emplyee of that company;

the payment by any company of any interest which represents no more than a reasonable commercial return on money lent to that company;

the payment by any company of any dividend or other distribution which does not exceed a normal return on any investment in shares in or other securities of that company;

any payment for the supply of goods which does not exceed their market value;

any payment for the acquisition of an asset which does not exceed its market value;

the payment by any company, as rent for any property occupied by the company, of an amount not exceeding a reasonable and commercial rent for the property;

a payment in discharge of an ordinary trade debt.

references to a debt or liability do not, in relation to a company, include references to any debt or liability which would be discharged by the making by that company of a qualifying payment; and

references to a benefit or facility do not include references to any benefit or facility provided in circumstances such that, if a payment had been made of an amount equal to its value, that payment would be a qualifying payment.

any reference to a payment or disposal to an individual includes a reference to a payment or disposal made to him indirectly or to his order or for his benefit;

any reference to an individual includes a reference to an associate of his; and

any reference to a company includes a reference to a person who at any time in the relevant period is connected with the company, whether or not he is so connected at the material time.

does not exceed six months; and

is not longer than that normally given to customers of the person carrying on the trade or business.

references to “the shares” shall be construed in accordance with sub-paragraph (1) above, and

references to “the period of restriction” shall be construed as references to the period of restriction relating to the shares.

in a case within sub-paragraph (2)(a), (b) or (c) of that paragraph, the amount received by the individual or, if greater, the market value of the share capital, securities or debt in question;

in a case within sub-paragraph (2)(d) of that paragraph, the amount of the liability;

in a case within sub-paragraph (2)(e) of that paragraph, the amount of the loan or advance reduced by the amount of any repayment made before the issue of the shares;

in a case within sub-paragraph (2)(f) of that paragraph, the cost to the company of providing the benefit or facility less any consideration given for it by the individual;

in a case within sub-paragraph (2)(g) or (h) of that paragraph, the difference between the market value of the asset and the consideration (if any) given for it;

in a case within sub-paragraph (2)(i) of that paragraph, the amount of the payment;

in a case within sub-paragraph (5) of that paragraph, the amount received by the individual or, if greater, the market value of the share capital or securities in question.

does not exceed £1,000, or

if it exceeds that amount, is insignificant in relation to the total amount of expenditure on the shares which is set under this Schedule against a corresponding total amount of the whole or any part of any chargeable gains.

beginning one year before the shares are issued, and

expiring at the end of the issue date,

any reference to the individual includes a reference to any person who, at any time in the period of restriction, is an associate of his (whether or not he is such an associate at the material time), and

the reference to the company includes a reference to any person who, at any time in the period of restriction, is connected with the company (whether or not that person is so connected at the material time).

by reason of a receipt of value within sub-paragraph (2) (other than paragraph (b)) or sub-paragraph (5) of paragraph 13 above (“the original value”), the shares would, in the absence of this paragraph, be treated as never having been eligible shares or as ceasing to be eligible shares on the date when the value is received,

the original supplier receives value (“the replacement value”) from the original recipient by reason of a qualifying receipt, and

the amount of the replacement value is not less than the amount of the original value,

where the receipt of the original value was within paragraph 13(2)(d) above, by reason of an event the effect of which is to reverse the event which constituted the receipt of the original value; or

where the receipt of the original value was within paragraph 13(5) above, by reason of the original recipient repurchasing the share capital or securities in question, or (as the case may be) reacquiring the right in question, for a consideration the amount or value of which is not less than the amount of the original value.

any payment for the acquisition of an asset which does not exceed its market value;

any payment in discharge of an ordinary trade debt (within the meaning of paragraph 13(11) above); and

any payment for shares in or securities of any company in circumstances that do not fall within sub-paragraph (4)(a)(ii) above.

in a case within sub-paragraph (4)(b) above, the same as the amount of the original value, and

in a case within sub-paragraph (4)(c) above, the amount or value of the consideration received by the original supplier,

the event occurs before the start of the period of restriction, or

in a case where the event occurs after the time the original recipient receives the original value, it does not occur as soon after that time as is reasonably practicable in the circumstances, or

where an appeal has been brought by the individual against an assessment made by virtue of paragraph 3(1)(e) above by reason of that receipt, the event occurs more than 60 days after the appeal has been finally determined.

But nothing in paragraph 13B above or this paragraph requires the replacement value to be received after the original value.

the receipt of the replacement value by the original supplier is a qualifying receipt for the purposes of paragraph 13B(1) above, and

be eligible for any relief under Chapter 3 of Part 7 of the Taxes Act (enterprise investment scheme: income tax relief) in relation to those shares or any other shares in the same issue, or

by virtue of his subscription for those shares or any other shares in the same issue, be treated as making a qualifying investment for the purposes of this Schedule.

sub-paragraph (3) above, and

section 223(3) of ITA 2007 (which makes corresponding provision in relation to EIS relief under Part 5 of that Act),

repays, redeems or repurchases any of its share capital which belongs to any member other than the individual or F33a person falling within sub-paragraph (3) below, or

makes any payment (directly or indirectly) to any such member, or to his order or for his benefit, for the giving up of his right to any of the share capital of the company or subsidiary on its cancellation or extinguishment.

if the repayment, redemption, repurchase or payment in question is made or effected on or before the date of the issue of the shares, as never having been eligible shares; and

if it is made or effected after that date, as ceasing to be eligible shares on the date when it is made or effected.

gives rise to a qualifying chargeable event in respect of him, or

causes any relief under Chapter III of Part VII of the Taxes Act F122or Part 5 of ITA 2007 attributable to his shares in the company to be withdrawn or reduced by virtue of section 299 or 300(2)(a) of F123the Taxes Act or section 209 or 216(2)(a) of ITA 2007, F36or

causes any investment relief F49attributable to shares held by that person (within the meaning of Schedule 15 to the Finance Act 2000) to be withdrawn or reduced by virtue of paragraph 46 (disposal of shares) or 49(1)(a) (repayment etc. of share capital or securities) of that Schedule

a chargeable event falling within paragraph 3(1)(a) or (b) above; or

a chargeable event falling within paragraph 3(1)(e) above by virtue of sub-paragraph (1)(b) of paragraph 13 above (as it applies by virtue of sub-paragraph (2)(a) of that paragraph).

a company issues share capital (“the original shares") of nominal value equal to the authorised minimum F144(within the meaning of the Companies Act 2006) for the purposes of complying with the requirements of section 761 of that Act (public company: requirement as to minimum share capital); and

after the registrar of companies has issued the company with a certificate under F145section 761, it issues eligible shares,

the market value of the shares to which it relates (“the target shares”) immediately before the event occurs, and

the amount received by the member in question,

for a repayment by the company or any subsidiary of the company (whether or not it is such a subsidiary at the time the arrangements are made), or

for anyone to be entitled to such a repayment,

beginning one year before the eligible shares were issued, and

expiring at the end of the issue date.

beginning one year before the shares mentioned in sub-paragraph (1) above are issued, and

expiring at the end of the issue date of those shares.

for a repayment by the company that issued the shares (“the issuing company”) or any subsidiary of that company, or

for anyone to be entitled to such a repayment,

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

when the arrangements were made.

“investment relief” has the same meaning as in F55Schedule 15 to the Finance Act 2000 (corporate venturing scheme); and

references to the withdrawal of investment relief include its reduction.

if the loan is made on or before the date of the issue of the shares, as never having been eligible shares; and

if the loan is made after that date, as ceasing to be eligible shares on the date when the loan is made.

to the giving by that person of any credit to that individual; and

to the assignment or assignation to that person of any debt due from that individual.

a chargeable event falling within paragraph 3(1)(a) or (b) above occurs at any time F59before the termination date relating to those shares,

a chargeable event falling within paragraph 3(1)(c) or (d) above occurs, or

a chargeable event falling within paragraph 3(1)(e) above occurs by virtue of paragraph 12(2)(b), 13(1)(b) or 15(1)(b) above,

the company, and

any person connected with the company who has knowledge of that matter,

a person is required to give a notice under sub-paragraph (1) or (2) above in respect of a chargeable event which occurs by virtue of paragraph 13(1)(b) above or would occur by virtue of that paragraph but for the operation of paragraph 13B above, and

that person has knowledge of the replacement value received (or expected to be received) from the original recipient by the original supplier by reason of a qualifying receipt,

the company, and

any person connected with the company who has knowledge of that matter,

that a person has given or received value (within the meaning of paragraph 13(2) or (5) above) which, but for the fact that the amount given or received was an amount of insignificant value (within the meaning of paragraph 13A(3) above), would have triggered a requirement to give a notice under sub-paragraph (1) or (2) above, or

that a person has made or received any repayment (within the meaning of paragraph 14AA(2) above) which, but for the fact that it falls to be disregarded for the purposes of paragraph 14 above by virtue of paragraph 14AA(1) above, would have triggered a requirement to give a notice under sub-paragraph (2) above,

a declaration in writing stating whether or not, according to the information which that person has or can reasonably obtain, any such arrangements exist or have existed;