F2PART 5BTax relief for social investments
CHAPTER 4Eligibility: conditions relating to the social enterprise
Conditions relating to the social enterpriseF1: general
Word in s. 257M cross-heading inserted (with effect in accordance with Sch. 1 para. 14(1)(2) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 1 para. 6(1)
257MLThe issue must be to raise money for chosen trade or preparing for it
1
The social enterprise must be a party to the making of the investment (so far as not in bonus shares) in order to raise money for the carrying-on, by the social enterprise or a 90% social subsidiary of the social enterprise, of—
a
a qualifying trade which on the investment date is carried on by the social enterprise or a 90% social subsidiary of the social enterprise, or
b
the activity of preparing to carry on (or preparing to carry on and then carrying on) a qualifying trade—
i
which on the investment date is intended to be carried on by the social enterprise or a 90% social subsidiary of the social enterprise, and
ii
which is begun to be carried by the social enterprise or such a subsidiary within 2 years after that date.
2
In this Chapter—
a
the purpose within subsection (1) for which money is raised is referred to as “the funded purpose”,
b
the qualifying trade mentioned in subsection (1)(a) or (b) is referred to as “the chosen trade”, and
c
if the funded purpose is the carrying-on of the activity mentioned in subsection (1)(b), “relevant preparation work” means preparations that form the whole or part of the activity.
3
In determining for the purposes of subsection (1)(b) when a qualifying trade is begun to be carried on by a 90% social subsidiary of the social enterprise, any carrying-on of the trade by it before it became such a subsidiary is ignored.
4
The reference in subsection (1)(b)(i) to a 90% social subsidiary of the social enterprise includes a reference to any existing or future body which will be such a subsidiary at any future time.
5
This section does not apply if the social enterprise is an accredited social impact contractor.
Pt. 5B inserted (17.7.2014) by Finance Act 2014 (c. 26), Sch. 11 para. 1