SCHEDULES
F3SCHEDULE 5B Enterprise investment scheme: re-investment
F2 Pre-arranged exits
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
11
1
Where an individual subscribes for eligible shares (“the shares") in a company, the shares shall be treated as not being eligible shares for the purposes of this Schedule if the relevant arrangements include—
a
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;
b
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;
c
arrangements for the disposal of, or of a substantial amount of, the assets of the company or of a person connected with the company;
d
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.
2
The arrangements referred to in sub-paragraph (1)(a) above do not include any arrangements with a view to such an exchange of shares, or shares and securities, as is mentioned in paragraph 8(1) above.
3
The arrangements referred to in sub-paragraph (1)(b) and (c) above do not include any arrangements applicable only on the winding up of a company except in a case where—
a
the relevant arrangements include arrangements for the company to be wound up; or
b
the company is wound up otherwise than for bona fide commercial reasons.
4
The arrangements referred to in sub-paragraph (1)(d) above do not include any arrangements which are confined to the provision—
a
for the company itself, or
b
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,
of any such protection against the risks arising in the course of carrying on its business as it might reasonably be expected so to provide in normal commercial circumstances.
5
The reference in sub-paragraph (4) above to the parent company of a trading group
F1a
shall be construed in accordance with the provision contained for the purposes of section 293 of the Taxes Act in that sectionF4, or
b
is a reference to a company that meets the trading requirement in section 181(2)(b) of ITA 2007.
6
In this paragraph “the relevant arrangements” means—
a
the arrangements under which the shares are issued to the individual; and
b
any arrangements made before the issue of the shares to him in relation to or in connection with that issue.
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)