Finance Act, 1998
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Restriction of relief as respects eligible shares issued on or after 3rd December, 1997. |
34.—The Principal Act is hereby amended in Part 16— | |
(a) subject to section 35 , as respects eligible shares issued on or after the 3rd day of December, 1997— | ||
(i) in section 491— | ||
(I) by the substitution of the following for subsections (2) and (3): | ||
“(2) (a) Subject to this section, where a company raises any amount through the issue of eligible shares on or after the 3rd day of December, 1997, (in this section referred to as ‘the relevant issue’), relief shall not be given in respect of the excess of the amount so raised over the amount determined by the formula— | ||
A− B | ||
where— | ||
A is— | ||
(i) in the case of a company which, or whose qualifying subsidiary, raises the amount by virtue of section 496(2)(a)(iv)(II), £100,000, | ||
(ii) in the case of a relevant investment, £500,000, | ||
(iii) in the case where the money raised was used, is being used or is intended to be used solely for qualifying trading operations referred to in section 496(2)(a)(ix) carried on or to be carried on by the company or its qualifying subsidiary, £1,000,000, or | ||
(iv) in any other case, £250,000, and | ||
B is the lesser of— | ||
(i) the appropriate amount represented by A in the formula, and | ||
(ii) an amount equal to the aggregate of all amounts raised by the company through the issue of eligible shares at any time before the relevant issue other than— | ||
(I) where A in the formula is £100,000, the first £400,000, and | ||
(II) where A in the formula is £250,000, the first £250,000, | ||
of any amounts raised by way of relevant investments. | ||
(b) (i) Where a company raises any amount through a relevant issue which amount consists of a relevant investment and any other amount, the relevant issue shall be deemed for the purposes of this subsection (but for no other purpose of this Part) to consist of 2 separate issues of eligible shares one of which shall be in respect of the relevant investment (in this paragraph referred to as ‘the first issue’) and the other in respect of the other amount raised (in this paragraph referred to as ‘the second issue’). | ||
(ii) Where subparagraph (i) applies, the first issue shall be deemed for the purposes of this subsection (but for no other purpose of this Part) to have been made on the day before the date of the relevant issue and the second issue shall be deemed for the purposes of this subsection (but for no other purpose of this Part) to have been made on the date of the relevant issue and paragraph (a) shall apply accordingly. | ||
(3) (a) Where a company raises any amount through a relevant issue and that company is associated (within the meaning of this section) with one or more other companies, then, as respects that company, relief shall not be given in respect of the excess of the amount so raised over the amount determined by the formula— | ||
A − B | ||
where— | ||
A is— | ||
(i) in the case of a company which, or whose qualifying subsidiary, raises the amount by virtue of section 496(2)(a)(iv)(II), £100,000, | ||
(ii) in the case of a relevant investment, £500,000, | ||
(iii) in the case where the money raised was used, is being used or is intended to be used solely for qualifying trading operations referred to in section 496(2)(a)(ix) carried on or to be carried on by the company or its qualifying subsidiary, £1,000,000, or | ||
(iv) in any other case, £250,000, and | ||
B is the lesser of— | ||
(i) the appropriate amount represented by A in the formula, and | ||
(ii) the aggregate of all amounts raised through the issue of eligible shares at any time before or on the date of the relevant issue by all of the companies (including that company) which are associated within the meaning of this section other than— | ||
(I) the amount raised through the relevant issue, and | ||
(II) (A) where A in the formula is £100,000, the first £400,000, and | ||
(B) where A in the formula is £250,000, the first £250,000, of any amounts raised by way of relevant investments. | ||
(b) (i) Where a company raises any amount through a relevant issue which amount consists of a relevant investment and any other amount, the relevant issue shall be deemed for the purposes of this subsection (but for no other purpose of this Part) to consist of 2 separate issues of eligible shares one of which shall be in respect of the relevant investment (in this paragraph referred to as ‘the first issue’) and the other in respect of the other amount raised (in this paragraph referred to as ‘the second issue’). | ||
(ii) Where subparagraph (i) applies, the first issue shall be deemed for the purposes of this subsection (but for no other purpose of this Part) to have been made on the day before the date of the relevant issue and the second issue shall be deemed for the purposes of this subsection (but for no other purpose of this Part) to have been made on the date of the relevant issue and paragraph (a) shall apply accordingly.”, | ||
and | ||
(II) by the substitution of the following subsection for subsection (5): | ||
“(5) In determining for the purposes of the formula in subsection (2)(a) or, as the case may be, the formula in subsection (3)(a) the amount to which paragraph (ii) of the definition of ‘B’ in those formulas relates, account shall not be taken of any amount— | ||
(a) which is subscribed by a person other than an individual who qualifies for relief, or | ||
(b) in respect of which relief is precluded by virtue of section 490.”, | ||
and | ||
(ii) by the deletion of section 492, | ||
(b) in section 498, as on and from the 12th day of February, 1998, by the substitution of the following subsection for subsection (4)— | ||
“(4) Where an individual holds ordinary shares of any class in a company and the relief has been given in respect of some shares of that class but not others, any disposal by the individual of ordinary shares of that class in the company, not being a disposal to which section 479(3) or 512(2) applies, shall be treated for the purposes of this section as relating to those in respect of which relief has been given under this Part rather than to others.”, | ||
and | ||
(c) in section 504, by the substitution in paragraph (a) of subsection (7) of “500” for “498”. |