Paragraph 55

United Kingdom

(1)

The receipt of the replacement value shall be disregarded for the purposes of sub-paragraph (1) of paragraph 54 to the extent to which it has previously been set (under that paragraph) against a receipt of value to prevent any reduction or withdrawal of investment relief under paragraph 47.

(2)

The receipt of the replacement value by the original supplier (“the event”) shall be disregarded for the purposes of paragraph 54(1) if—

(a)

the event occurs before the start of the period of restriction relating to the relevant shares,

(b)

there was an unreasonable delay in the event occurring, or

(c)

where an appeal has been brought by the investing company against an assessment to withdraw or reduce any investment relief attributable to the relevant shares by reason of the receipt of the original value, the event occurs more than 60 days after the amount of relief which falls to be withdrawn has been finally determined.

But nothing in paragraph 54 or this paragraph requires the replacement value to be received after the original value.

(3)

Sub-paragraph (4) applies where—

(a)

the receipt of the replacement value is a qualifying receipt for the purposes of paragraph 54(1) (receipt of replacement value which prevents loss of investment relief), and

(b)

the event which gives rise to the receipt is (or includes) a subscription for shares by—

(i)

the investing company, or

(ii)

any person who at any time in the period of restriction relating to the relevant shares is connected with the investing company, whether or not he is connected at the material time.

(4)

Where this sub-paragraph applies the person who subscribes for the shares shall not—

(a)

be eligible for—

(i)

any investment relief, or

(ii)

any relief under Chapter III of Part VII of the Taxes Act 1988 F1or Part 5 of ITA 2007 (EIS income tax relief),

in relation to those shares or any other shares in the same issue; or

(b)

by virtue of his subscription for those shares or any other shares in the same issue, be treated as making a qualifying investment for the purposes of Schedule 5B to the 1992 Act (EIS: deferral relief).

F2(5)

In this paragraph “the original value” and “the replacement value” shall be construed in accordance with paragraph 54.

Annotations

Textual amendments

F1: Words in Sch. 15 para. 55(4) inserted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 394(3) (with Sch. 2)
F2: Sch. 15 para. 55(5) inserted (retrospectively) by 2001 c. 9, s. 64, Sch. 16 para. 7