1

At least 80% of the money raised by the issuance of the relevant issue of shares must have been employed wholly for the purposes of a relevant trade not later than the time determined in accordance with sub-paragraph (1B).

1A

All of the money so raised must have been so employed not later than 12 months after that time.

1B

The time referred to in sub-paragraph (1) is—

a

the end of the period of 12 months beginning with the issue of the shares, or

b

where the relevant trade was not being carried on at the time the shares were issued, the end of the period of 12 months beginning when the issuing company or a subsidiary begins to carry on the relevant trade.

1C

Sub-paragraphs (1) and (1A) are subject to sub-paragraph (5).

2A

Where the amount of the original value is, by virtue of paragraph 51, treated as reduced for the purposes of paragraph 47, the reference in sub-paragraph (1)(c) to the amount of the original value shall be read as a reference to the amount of that value disregarding the reduction.

a

by reason of the original recipient doing one or more of the following—

i

making a payment to the original supplier other than an excepted payment;

ii

acquiring any asset from the original supplier for a consideration the amount or value of which is more than the market value of the asset;

iii

disposing of any asset to the original supplier for no consideration or for a consideration the amount or value of which is less than the market value of the asset; or

b

where the receipt of the original value was within paragraph 49(1)(d), by reason of an event the effect of which is to reverse the event which constituted the receipt of the original value.

3A

For the purposes of sub-paragraph (3)(a)(i), the following are excepted payments—

a

any payment for any goods, services or facilities, provided (whether in the course of a trade or otherwise) by—

i

the original supplier, or

ii

any other person who, at any time in the period of restriction relating to the relevant shares, is an associate of, or connected with, that supplier (whether or not he is such an associate, or so connected, at the material time),

which is reasonable in relation to the market value of those goods, services or facilities;

b

any payment of any interest which represents no more than a reasonable commercial return on money lent to—

i

the original recipient, or

ii

any other person who, at any time in the period of restriction relating to the relevant shares, is an associate of, or connected with, that recipient (whether or not he is such an associate, or so connected, at the material time);

c

any payment, as rent for any property occupied by—

i

that recipient, or

ii

any person who, at any time in the period of restriction relating to the relevant shares, is an associate of, or connected with, that recipient (whether or not he is such an associate, or so connected, at the material time),

of an amount not exceeding a reasonable and commercial rent for the property;

d

any payment within paragraph (c), (d) or (f) of the definition of “qualifying payment” in paragraph 49(5); and

e

any payment for shares in or securities of any company in circumstances that do not fall within sub-paragraph (3)(a)(ii).

4

For the purposes of this paragraph, the amount of the replacement value is—

a

in a case within paragraph (a) of sub-paragraph (3), the aggregate of—

i

the amount of any payment within sub-paragraph (i) of that paragraph, and

ii

the difference between the market value of any asset to which sub-paragraph (ii) or (iii) of that paragraph applies and the amount or value of the consideration (if any) received for it, and

b

in a case within sub-paragraph (3)(b), the amount of the original value,

and paragraph 50 shall apply for the purposes of determining the amount of the original value.

5

In this paragraph “the original value” and “the replacement value” shall be construed in accordance with paragraph 54.

or it would have the effect mentioned in paragraph (a), (b) or (c) were it not a receipt of insignificant value for the purposes of paragraph 47 (value received by the investing company), section 300 of the Taxes Act 1988 or paragraph 13 of Schedule 5B to the 1992 Act, as the case may be