SCHEDULES

F1SCHEDULE 5B Enterprise investment scheme: re-investment

Annotations:
Amendments (Textual)
F1

Sch. 5B inserted (with effect in accordance with Sch. 13 para. 4(4) of the amending Act) by Finance Act 1995 (c. 4), Sch. 13 para. 4(3)

F2 Value received by other persons

Annotations:
Amendments (Textual)
F2

Sch. 5B paras. 10-15 and cross-headings inserted (with effect in accordance with s. 74(3) of the amending Act) by Finance Act 1998 (c. 36), Sch. 13 para. 35

14

1

Sub-paragraph (2) below applies where an individual subscribes for eligible shares (“the shares") in a company and at any time in the F7period of restriction the company or any subsidiary—

a

repays, redeems or repurchases any of its share capital which belongs to any member other than the individual or F3a person falling within sub-paragraph (3) below, or

b

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.

F4This is subject to F8paragraphs 14AA and 14A below.

2

The shares shall be treated for the purposes of this Schedule—

a

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

b

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

3

F5A person falls within this sub-paragraph if the repayment, redemption, repurchase or payment in question—

a

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

b

causes any relief under Chapter III of Part VII of the Taxes Act F13or Part 5 of ITA 2007 attributable to his shares in the company to be withdrawn or reduced by virtue of section 299 or 300(2)(a) of F14the Taxes Act or section 209 or 216(2)(a) of ITA 2007, F6or

c

causes any investment relief F9attributable to shares held by that person (within the meaning of Schedule 15 to the Finance Act 2000) to be withdrawn or reduced by virtue of paragraph 46 (disposal of shares) or 49(1)(a) (repayment etc.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

F10or it would have the effect mentioned in paragraph (a), (b) or (c) above were it not a receipt of insignificant value for the purposes of paragraph 13 above, section 300 of the Taxes Act F15or 214 of ITA 2007 or paragraph 47 of Schedule 15 to the Finance Act 2000, as the case may be.

4

In sub-paragraph (3) above “qualifying chargeable event” means—

a

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

b

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).

5

Where—

a

a company issues share capital (“the original shares") of nominal value equal to the authorised minimum F16(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

b

after the registrar of companies has issued the company with a certificate under F17section 761, it issues eligible shares,

the preceding provisions of this paragraph 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.

F186

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7

References in this paragraph F11and F12paragraphs 14AA and 14A below to a subsidiary of a company are references to a company which at any time in the relevant period is a 51 per cent. subsidiary of the first mentioned company, whether or not it is such a subsidiary at the time of the repayment, redemption, repurchase or payment in question.