(1)If this section applies, subsections (2) to (8) have effect to determine the extent to which, and the times for which, the requirements of the following provisions of Chapter 4 are met in relation to the new shares—
section 287 (the maximum qualifying investment requirement),
section 289 (the proportion of eligible shares requirement),
section 290 (the trading requirement),
section 291 (the carrying on of a qualifying activity requirement),
section 293 (the use of the money raised requirement),
section 294 (the relevant company to carry on the relevant qualifying activity requirement),
section 296 (the control and independence requirement), F1...
section 297 (the gross assets requirement)[F2, and
section 297A (the number of employees requirement). ]
(2)If the requirements of sections 290 and 291 were met in relation to the old company and any old shares immediately before the beginning of the period for giving effect to the arrangements, then (so far as it would not otherwise be the case) those requirements are treated as being met in relation to the new company and the matching new shares at all times which—
(a)fall in that period, and
(b)do not fall after a time when (apart from the arrangements) those requirements would have ceased by virtue of—
(i)section 291(4) or (5), or
(ii)any cessation of a trade by any company,
to be met in relation to the old company and the matching old shares.
(3)For the purposes of section 291, the period of two years mentioned in subsection (4) of that section is treated, in the case of any new shares, as expiring at the same time as it would have expired (or by virtue of this subsection would have been treated as expiring) in the case of the matching old shares.
(4)Subject to subsection (5), if—
(a)there is an exchange under the arrangements of any new shares for any old shares, and
(b)those old shares are shares in relation to which the requirements of sections 293, 294[F3, 297 and 297A] were (or were treated as being) met to any extent immediately before the exchange,
those requirements are to be treated, at all times after that time, as met to the same extent in relation to the matching new shares.
(5)If there is a time following any exchange under the arrangements of any new shares for any old shares when (apart from the arrangements) the requirement of section 293 would have ceased under—
(a)subsection (1) of that section, or
(b)this subsection,
to be met in relation to those old shares, that requirement ceases at that time to be met in relation to the matching new shares.
(6)For the purposes of section 287, any new shares acquired under the arrangements are to be treated as representing an investment which—
(a)raised the same amount of money as was raised (or, by virtue of this subsection, is treated as having been raised) by the issue of the matching old shares, and
(b)raised that amount by an issue of shares in the new company made at the time when the issue of the matching old shares took place (or, as the case may be, is treated as having taken place).
(7)In determining whether the requirements of section 296 are met in relation to the old company or the new company at a time in the period for giving effect to the arrangements, ignore both—
(a)the arrangements themselves, and
(b)any exchange of new shares for old shares that has already taken place under the arrangements.
(8)For the purposes of section 289, the value of the new shares, both—
(a)immediately after the time of their acquisition, and
(b)immediately after the time of any subsequent relevant event occurring by virtue of the arrangements,
is to be taken to be the same as the value, when last valued in accordance with that section, of the old shares for which they are exchanged.
Textual Amendments
F1Word in s. 327(1) repealed (19.7.2007) by Finance Act 2007 (c. 11), Sch. 27 Pt. 2(16)
F2Words in s. 327(1) inserted (retrospective to 6.4.2007) by Finance Act 2007 (c. 11), Sch. 16 para. 3(4)(a), (5) (with Sch. 16 para. 3(6)(7))
F3Words in s. 327(4)(b) substituted (retrospective to 6.4.2007) by Finance Act 2007 (c. 11), Sch. 16 para. 3(4)(b)(5) (with Sch. 16 para. 3(6)(7))