Paragraph 54

United Kingdom

(1)

Where—

(a)

any investment relief attributable to the relevant shares would, in the absence of this paragraph, be reduced or withdrawn under paragraph 47 by reason of a receipt of value within paragraph 49(1) (“the original value”),

(b)

the original supplier receives value (“the replacement value”) from the original recipient by reason of a qualifying receipt, and

(c)

F1the amount of the replacement value is not less than the amount of the original value,

paragraph 47 shall not, by reason of the receipt of the original value, have effect to reduce or withdraw the investment relief.

(2)

For the purposes of this paragraph and paragraph 55—

“the original recipient” means the person who receives the original value; and
“the original supplier” means the person from whom that value was received.

F2(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.

(3)

A receipt of the replacement value is a qualifying receipt for the purposes of sub-paragraph (1) if it arises—

F3(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.

F4(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).

F5(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.

Annotations

Textual amendments

F1: Words in Sch. 15 para. 54(1)(a) inserted (retrospectively) by 2001 c. 9, s.64, Sch. 16 para. 6(1)(6)
F2: Sch. 15 para. 54(2A) inserted (11.5.2001 with effect as mentioned in Sch. 16 para. 6(7) of the amending Act) by 2001 c. 9, s. 64, Sch. 16 para. 6(2)(7)
F3: Sch. 15 para. 54(3)(a)(b) substituted (11.5.2001 with effect as mentioned in Sch. 16 para. 6(7) of the amending Act) for Sch. 15 para. 54(3)(a)-(c) by 2001 c. 9, s. 64, Sch. 16 paras. 6(3)(7)
F4: Sch. 15 para. 54(3A) inserted (11.5.2001 with effect as mentioned in Sch. 16 para. 6(7) of the amending Act) by 2001 c. 9, s. 64, Sch. 16 para. 6(4)(7)
F5: Sch. 15 para. 54(4) substituted (11.5.2001 with effect as mentioned in Sch. 16 para. 6(7) of the amending Act) by 2001 c. 9, s. 64, Sch. 16 para. 6(5)(7)