81(1)Where—U.K.
(a)a company (“the company”) holds shares (“the existing holding”) which—
(i)form part of the ordinary share capital of another company, and
(ii)are of the same class and held in the same capacity,
(b)there is by virtue of such an allotment as is mentioned in section 126(2)(a) of the 1992 Act (an allotment of shares or debentures in respect of and in proportion to an original holding), other than an allotment of corresponding bonus shares, a reorganisation affecting the existing holding,
(c)immediately following the reorganisation, investment relief is attributable to the shares comprised in the existing holding or the shares allotted in respect of those shares, and
(d)if investment relief is attributable to the shares comprised in the existing holding at that time, those shares have been held by the company continuously from the time they were issued until the reorganisation,
sections 127 to 130 of that Act (treatment of share capital following a reorganisation) shall not apply in relation to the existing holding.
(2)Subsection (10) of section 116 of that Act (reorganisations, conversions and reconstructions) shall not apply in any case where the old asset consists of shares held (in the same capacity) by a company—
(a)that have been held by it continuously from the time they were issued until the relevant transaction, and
(b)to which investment relief is attributable immediately before that transaction.
In this sub-paragraph “old asset” and “the relevant transaction” have the meanings given in section 116 of that Act.
(3)For the purposes of sub-paragraph (1)—
“” means bonus shares that—
are issued in respect of shares comprised in the existing holding, and
are of the same class, and carry the same rights, as those shares;
“reorganisation” has the meaning given in section 126 of that Act.