PART 1 U.K.Income Tax, Corporation Tax and Capital Gains Tax

CHAPTER 5 U.K.Other provisions

Seed enterprise investment scheme U.K.

56 SEIS: income tax relief U.K.

(1) ITA 2007 is amended as follows.

(2) In section 29 (tax reductions: supplementary), in subsection (4B), after the entry for Chapter 1 of Part 5 insert— “ Chapter 1 of Part 5A (SEIS relief), ”.

(3) In section 32 (liability not dealt with in the calculation), after the entry for section 235 insert— “ under section 257G (withdrawal or reduction of SEIS relief), ”.

(4) In section 257DG (the control and independence requirement), for subsection (2) substitute—

“(2) The independence element of the requirement is that—

(a) the issuing company must not at any time in period A (ignoring any on-the-shelf period) be within subsection (2A), and

(b) no arrangements must be in existence at any time in period A by virtue of which the issuing company could be within that subsection (whether during period A or otherwise).

(2A) The issuing company is within this subsection at any time if it is under the control of any other company (or of another company and any other person connected with that other company).

(2B) In subsection (2)(a) “on-the-shelf period” means a period during which the issuing company—

(a) has not issued any shares other than subscriber shares, and

(b) has not begun to carry on, or make preparations for carrying on, any trade or business.”

(5) The amendments made by subsections (2) and (3) have effect for the tax year 2013-14 and subsequent tax years.

(6) The amendment made by subsection (4) has effect in relation to shares issued on or after 6 April 2013.

57 SEIS: re-investment relief U.K.

(1) Schedule 5BB to TCGA 1992 (seed enterprise investment scheme: re-investment) is amended as follows.

(2) In paragraph 1 (SEIS re-investment relief)—

(a) in sub-paragraph (2)—

(i) in paragraph (a), after “the tax year 2012-13” insert “ or the tax year 2013-14 (the year in question being referred to in this Schedule as “the relevant year”) ”, and

(ii) in paragraph (b), for “that year” substitute “ the relevant year ”,

(b) in sub-paragraph (3)(a), for “tax year 2012-13” substitute “ relevant year ”, and

(c) for sub-paragraph (5) substitute—

“(5) The relevant percentage of the available SEIS expenditure is to be set against a corresponding amount of the original gain.

(5A) In sub-paragraph (5)—

• “the available SEIS expenditure” means so much of the SEIS expenditure as—

  (a)

  is specified in the claim,

  (b)

  is unused, and

  (c)

  does not exceed so much of the original gain as is unmatched;

• “the relevant percentage” means—

  (a)

  if the relevant year is the tax year 2012-13, 100%, and

  (b)

  if the relevant year is the tax year 2013-14, 50%.”

(3) In paragraph 2 (restrictions on relief under paragraph 1)—

(a) in sub-paragraph (1), for “tax year 2012-13” substitute “ relevant year ”, and

(b) in sub-paragraph (2)—

(i) for “tax year 2012-13” substitute “ relevant year ”, and

(ii) for “that tax year” substitute “ that year ”.

(4) In paragraph 5 (removal or reduction of relief) in sub-paragraph (2) for “2012-13” substitute “ in which the shares were issued ”.

(5) Accordingly, in section 150G of TCGA (which introduces Schedule 5BB), for “tax year 2012-13” substitute “ tax years 2012-13 and 2013-14 ”.