2(1)Section 150A (enterprise investment scheme) shall be amended as mentioned in sub-paragraphs (2) to (4) below; and the amendments made by sub-paragraphs (2) and (3) below shall apply in relation to shares issued on or after 1st January 1994.
(2)The following subsection shall be inserted after subsection (2)—
“(2A)Notwithstanding anything in section 16(2), subsection (2) above shall not apply to a disposal on which a loss accrues.”
(3)In subsection (3) (reduction of relief) the following paragraph shall be inserted after paragraph (a)—
“(aa)the amount of the reduction is not found under section 289A(2)(b) of that Act, and”.
(4)The following subsections shall be inserted after subsection (8) (which disapplies provisions about exchanges, reconstructions or amalgamations in certain circumstances)—
“(8A)Subsection (8) above shall not have effect to disapply section 135 or 136 where—
(a)the new holding consists of new ordinary 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 preferential right to be redeemed,
(b)the new shares are issued on or after 29th November 1994 and after the end of the relevant period, and
(c)the condition in subsection (8B) below is satisfied.
(8B)The condition is that at some time before the issue of the new shares—
(a)the company issuing them issued eligible shares, and
(b)a certificate in relation to those eligible shares was issued by the company for the purposes of subsection (2) of section 306 of the Taxes Act and in accordance with that section.
(8C)In subsection (8A) above—
(a)“new holding” shall be construed in accordance with sections 126, 127, 135 and 136;
(b)“relevant period” means the period found by applying section 312(1A)(a) of the Taxes Act by reference to the company issuing the shares referred to in subsection (8) above and by reference to those shares.”