Legalize / United Kingdom / Public General Act

Income Tax Act 2007

Type Public General Act

Publication 2007-03-20

Last updated 2026-01-20

State In force

Department Statute Law Database

Source legislation.gov.uk

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(b) A transferred the shares to another individual (“B”) during their lives,

(d) section 257FA (disposal of shares) does not apply to the transfer.

(2) This Part has effect, in relation to any subsequent disposal or other event, as if—

(a) B were the individual who had subscribed for the shares,

(b) the amount that B had subscribed for the shares were the amount that A had subscribed for them,

(c) B's liability to income tax had been reduced in respect of the shares for the same tax year as that for which A's was so reduced,

(d) the amount by which B's liability to income tax had been reduced in respect of the shares were the same as that by which A's liability to income tax had been so reduced, and

(e) that amount of SEIS relief had continued to be attributable to the shares despite the transfer.

(3) If the amount of SEIS relief attributable to the shares had been reduced before the relief was obtained by A—

(a) this Part has effect, in relation to any subsequent disposal or other event, as if the amount of SEIS relief attributable to the shares transferred to B had been correspondingly reduced before the relief was obtained by B, and

(b) sections 257FB(3) and 257FL(2) apply in relation to B as they would have applied in relation to A.

(4) If, because of any such disposal or other event, an assessment for reducing or withdrawing SEIS relief is to be made, the assessment is to be made on B.

257HA

(1) The rules in subsections (2) and (3) are for determining which shares of any class are treated as disposed of for the purposes of—

(a) section 257FA (disposal of shares), or

(b) section 257H (spouses or civil partners),

if the investor disposes of some but not all of the shares of that class which the investor holds in a company.

(2) Shares acquired on an earlier day are treated as disposed of before shares acquired on a later day.

(3) Shares acquired on the same day are treated as disposed of in the following order—

(a) first any to which no SEIS relief is attributable,

(b) next any to which SEIS relief (but not SEIS re-investment relief) is attributable, and

(4) Any shares to which SEIS relief is attributable and which were transferred to an individual as mentioned in section 257H are treated for the purposes of subsections (2) and (3) as acquired by the individual on the day on which they were issued.

(5) In a case to which section 127 of TCGA 1992 applies (including the case where that section applies by virtue of an enactment relating to chargeable gains), shares included in the new holding are treated for the purposes of subsections (2) and (3) as acquired when the original shares were acquired.

(6) In this section—

“new holding” and “original shares” have the same meaning as in section 127 of TCGA 1992 (or, as the case may be, that section as applied by the enactment concerned);

“SEIS re-investment relief” means relief under Schedule 5BB to TCGA 1992.

Acquisition of issuing company

257HB

(1) This section applies if—

(a) a company (“the new company”) in which the only issued shares are subscriber shares acquires all the shares (“old shares”) in another company (“the old company”),

(b) the consideration for the old shares consists wholly of the issue of shares (“new shares”) in the new company,

(c) the consideration for the new shares of each description consists wholly of old shares of the corresponding description,

(d) new shares of each description are issued to the holders of old shares of the corresponding description in respect of and in proportion to their holdings,

(e) at some time before the issue of the new shares—

(i) the old company issued shares which meet the requirements of section 257CA(2), and

(ii) a compliance certificate in respect of those shares was issued by that company for the purposes of subsection (1) of section 257EB and in accordance with section 257EC, and

(f) before the issue of the new shares the Commissioners for Her Majesty's Revenue and Customs have, on the application of the new company or the old company, notified that company that they are satisfied that the exchange of shares—

(i) will be effected for genuine commercial reasons, and

(ii) will not form part of any such scheme or arrangements as are mentioned in section 137(1) of TCGA 1992 (schemes with avoidance purposes).

In this subsection references to shares, except in the expressions “subscriber shares” and “shares which meet the requirements of section 257CA(2)“, include securities.

(2) Subsection (2) of section 138 of TCGA 1992 (procedure for advance clearance) applies for the purposes of subsection (1)(f) as it applies for the purposes of subsection (1) of that section.

(3) For the purposes of this Part—

(a) the exchange of shares is not regarded as involving any disposal of the old shares or any acquisition of the new shares, and

(b) any SEIS relief which is attributable to any old shares is attributable instead to the new shares for which they are exchanged.

(4) Nothing in section 257DG (the control and independence requirement) applies in relation to such an exchange of shares, or shares and securities, as is mentioned in subsection (1), or arrangements with a view to such an exchange.

(5) For the purposes of this section old shares and new shares are of a corresponding description if, on the assumption that they were shares in the same company, they would be of the same class and carry the same rights.

(6) References in sections 257HC and 257HD to “old shares”, “new shares”, “the old company” and “the new company” are to be read in accordance with this section.

257HC

(1) This section applies if, under section 257HB, any SEIS relief which is attributable to any old shares becomes attributable instead to any new shares.

(2) This Part has effect as if anything which under—

(a) section 257EB(1) (entitlement to claim),

(b) section 257FR(3) (relief subsequently found not to be due), or

has been done, or is required to be done, by or in relation to the old company had been done, or were required to be done, by or in relation to the new company.

(3) Any appeal brought by the old company against a notice under section 257FR(3)(b) may be prosecuted by the new company as if it had been brought by that company.

257HD

(1) Subsection (2) applies if, in the case of any new shares held by an individual to which SEIS relief becomes attributable under section 257HB, the old shares for which they were exchanged were subscribed for by and issued to the individual.

(2) This Part has effect as if—

(a) the new shares had been subscribed for by the individual at the time when, and for the amount for which, the old shares were subscribed for by the individual,

(b) the new shares had been issued to the individual by the new company at the time when the old shares were issued to the individual by the old company,

(d) the individual's liability to income tax had been reduced in respect of the new shares for the same tax year as that for which the individual's liability was so reduced in respect of the old shares.

(3) Subsection (4) applies if, in the case of any new shares held by an individual to which SEIS relief becomes so attributable under section 257HB, the old shares for which they were exchanged were transferred to the individual as mentioned in section 257H.

(4) This Part has effect in relation to any subsequent disposal or other event as if—

(a) the new shares had been subscribed for by the individual at the time when, and for the amount for which, the old shares were subscribed for,

(b) the new shares had been issued by the new company at the time when the old shares were issued by the old company,

(d) the individual's liability to income tax had been reduced in respect of the new shares for the same tax year as that for which the liability of the individual who subscribed for the old shares was so reduced in respect of those shares.

Nominees etc

257HE

(1) Shares subscribed for, issued to, held by or disposed of for an individual by a nominee are treated for the purposes of this Part as subscribed for, issued to, held by or disposed of by the individual.

(2) If shares have been issued to a bare trust for two or more beneficiaries, this Part has effect (with the necessary modifications) as if—

(a) each beneficiary had subscribed as an individual for all of those shares, and

(b) the amount subscribed by each beneficiary was equal to the total amount subscribed on the issue of those shares divided by the number of beneficiaries.

(3) In subsection (2) “shares” means shares which meet the requirements of section 257CA(2).

Interpretation

257HF

(1) For the purposes of this Part a qualifying trade carried on by the issuing company or a qualifying 90% subsidiary of that company (“the relevant company”) is a “new qualifying trade” if (and only if)—

(a) the trade does not begin to be carried on (whether by the relevant company or any other person) before the three year pre-investment period, and

(b) at no time before the relevant company begins to carry on the trade was any other trade being carried on by the issuing company or by any company that was a 51% subsidiary of the issuing company at the time in question.

(2) In this section—

“qualifying trade” has the same meaning as in Part 5 (see sections 189 and 192 to 200);

“three year pre-investment period” means the period of 3 years ending immediately before the day on which the relevant shares are issued.

257HG

(1) In this Part “qualifying business activity”, in relation to the issuing company, means—

(a) activity A, or

(b) activity B,

if it is carried on by the company or a qualifying 90% subsidiary of the company.

This is subject to subsection (3).

(2) Activity A is—

(a) the carrying on of a new qualifying trade which, on the date the relevant shares are issued, the company or a qualifying 90% subsidiary of the company is carrying on, or

(b) the activity of preparing to carry on (or preparing to carry on and then carrying on) a new qualifying trade—

(i) which, on that date, is intended to be carried on by the company or such a subsidiary, and

(ii) which is begun to be carried on by the company or such a subsidiary.

(3) Activity B is the carrying on of research and development—

(a) which, on the date the relevant shares are issued, the company or a qualifying 90% subsidiary of the company is carrying on, or which the company or such a subsidiary begins to carry on immediately afterwards, and

(b) from which, on that date, it is intended—

(i) that a new qualifying trade which the company or such a subsidiary will carry on will be derived, or

(ii) that a new qualifying trade which the company or such a subsidiary is carrying on, or will carry on, will benefit.

(4) For the purposes of subsection (3)(a), when research and development is begun to be carried on by a qualifying 90% subsidiary of the issuing company, any carrying on of the research and development by it before it became such a subsidiary is ignored.

(5) References in subsection (2)(b)(i) or (3)(b) to a qualifying 90% subsidiary of the issuing company include references to any existing or future company which will be such a subsidiary at any future time.

257HH

(1) In this Part references to a disposal of shares include a reference to a disposal of an interest or right in or over shares.

(2) An individual is to be treated, for the purposes of this Part, as disposing of any shares which the individual is treated by virtue of section 136 of TCGA 1992 as exchanging for other shares.

257HI

(1) In this Part—

(a) references (however expressed) to an issue of shares in any company are to such of the shares in the company as are of the same class and issued on the same day, and

(b) references (however expressed) to an issue of shares in any company to an individual are to such of the shares in the company as are of the same class and are issued to the individual in one capacity on the same day.

(2) Subsection (1)(b) has effect subject to sections 257E(6), 257EA(2), 257FB(2) and 257FK(1).

257HJ

(1) In this Part—

“arrangements” includes any scheme, agreement, understanding, transaction or series of transactions (whether or not legally enforceable);

“associate” has the same meaning as in Part 5 (see section 253);

“bonus shares” means shares which are issued otherwise than for payment (whether in cash or otherwise);

“director” is read in accordance with section 452 of CTA 2010;

“EIS relief” means relief under Part 5;

“group” means a parent company and its qualifying subsidiaries;

“group company”, in relation to a group, means the parent company or any of its qualifying subsidiaries;

“ordinary shares” means shares forming part of a company's ordinary share capital;

“parent company” means a company that has one or more qualifying subsidiaries, and “single company” means a company that does not;

“permanent establishment” has the same meaning as in Part 5 (see section 191A);

“qualifying subsidiary” has the same meaning as in Part 5 (see section 191);

“qualifying 90% subsidiary” has the same meaning as in Part 5 (see section 190);

“research and development” has the meaning given by section 1006.

(2) Section 252 (meaning of a company being “in administration” or “in receivership”) applies for the purposes of this Part.

(3) Section 995 (control) does not apply for the purposes of the following provisions—

(a) section 257DG(1)(a),

(b) section 257FP,

(d) section 257GH(4);

and in those provisions “control” is to be read in accordance with sections 450 and 451 of CTA 2010.

(4) In this Part—

(a) references in any provision to the reduction of any SEIS relief attributable to any shares include a reference—

(i) to the reduction of the relief to nil, and

(ii) if no relief has yet been obtained, to the reduction of the amount which apart from that provision would be the SEIS relief, and

(b) references to the withdrawal of SEIS relief in respect of any shares are—

(i) to the withdrawal of the SEIS relief attributable to those shares, or

(ii) if no relief has yet been obtained, to ceasing to be eligible for SEIS relief in respect of those shares.

(5) For the purposes of this Part shares in a company are not treated as being of the same class unless they would be so treated if dealt in on a recognised stock exchange.

(6) For the purposes of this Part the market value at any time of any asset is the price which it might reasonably be expected to fetch on a sale at that time in the open market free from any interest or right which exists by way of security in or over it.

(7) In this Part—

(a) references to SEIS relief obtained by an individual in respect of any shares include a reference to SEIS relief obtained by the individual in respect of those shares at any time after the individual has disposed of them, and

(b) references to the withdrawal or reduction of SEIS relief obtained by an individual in respect of any shares include a reference to the withdrawal or reduction of SEIS relief obtained by the individual in respect of those shares at any time.

(8) In the case of requirements that cannot be met until a future date, references in this Part to requirements being met for the time being are to nothing having occurred to prevent their being met.

280B

(1) This section applies for the purposes of the investment limits condition.

(2) Where a company (“the investor”) makes an investment (“the current investment”) in another company (“the relevant company”), that investment breaches the permitted investment limits if one or more of the following applies—

(a) the total annual investment in the relevant company exceeds the amount for the time being specified in section 292A(1);

(b) the total investment in the relevant company at the investment date exceeds the amount specified in—

(i) if the relevant company is a knowledge-intensive company (see section 331A) at the investment date, section 292AA(1)(a), and

(ii) in any other case, section 292AA(1)(b);

(c) condition A or B is met and the total investment in the relevant company at any time during the 5-year post-investment period exceeds the amount specified in—

(i) if the relevant company is a knowledge-intensive company at the investment date, section 292AB(4)(a), and

(ii) in any other case, section 292AB(4)(b).

(2A) In this section—

“the investment date” means the date the current investment is made;

“the 5-year post-investment period” means the period of 5 years beginning with the day after the investment date.

(3) For the purposes of subsection (2)(a), the total annual investment in the relevant company is the sum of—

(a) the amount of the current investment,

(b) the total amount of other relevant investments made (whether or not by the investor), in the year ending with the day on which the current investment is made, in—

(i) the relevant company, or

(ii) a company that has at any time in that year been a 51% subsidiary of the relevant company,

(including investments made in such a company before it became such a subsidiary but, if it is not such a subsidiary at the end of that year, not investments made in it after it last ceased to be such a subsidiary), and

(c) the total amount of any other relevant investments (whether or not made by the investor) which are relevant imported investments.

(3A) For the purposes of subsection (2)(b), the total investment in the relevant company at the investment date is the sum of—

(a) the amount of the current investment,

(b) the total amount of other relevant investments made (whether or not by the investor), on or before the investment date, in—

(i) the relevant company, or

(ii) a company that is at the investment date, or has at any time before that date been, a 51% subsidiary of the relevant company,

(including investments made in such a company before it became such a subsidiary but, if it is not such a subsidiary at the investment date, not investments made in it after it last ceased to be such a subsidiary), and

(c) the total amount of any other relevant investments (whether or not made by the investor) which are relevant imported investments.

(3B) For the purposes of subsection (2)(c)—

(a) condition A is that—

(i) a company becomes a 51% subsidiary of the relevant company during the 5-year post-investment period,

(ii) all or part of the money raised by the current investment is employed for the purposes of an activity which consists wholly or in part of a trade carried on by that company, and

(iii) that trade (or a part of it) was carried on by that company before it became a 51% subsidiary as mentioned in sub-paragraph (i);

(b) condition B is that all or part of the money raised by the current investment is employed for the purposes of an activity which consists wholly or in part of a trade which, during the 5-year post-investment period, becomes a relevant transferred trade (see subsection (3F).

(3C) For the purposes of subsection (2)(c), the total investment in the relevant company at a time during the 5-year post-investment period (“the relevant time”) is the sum of—

(a) the amount of the current investment,

(b) the total amount of other relevant investments made, before the relevant time (whether or not by the investor), in—

(i) the relevant company, or

(ii) a company that at the relevant time is, or before that time has been, a 51% subsidiary of the relevant company,

(including investments made in such a company before it became such a subsidiary but, if it is not such a subsidiary at the relevant time, not investments made in it after it last ceased to be such a subsidiary), and

(c) the total amount of any other relevant investments (whether or not made by the investor) which are relevant imported investments.

(3D) In this section “relevant imported investment” means—

(a) a relevant investment

(i) which is made in a company at a qualifying time, and

(ii) the money raised by which is employed for the purposes of a trade carried on by another company that is, at a qualifying time, a 51% subsidiary of the relevant company (but, if at the latest possible qualifying time it has ceased to be such a subsidiary, ignoring any money so employed after it last ceased to be such a subsidiary), or

(b) a relevant investment—

(i) which is made in a company at a qualifying time, and

(ii) the money raised by which is employed for the purposes of a trade carried on by that company or another person,

where, at a qualifying time but after that investment was made, that trade (or a part of it) became a relevant transferred trade (see subsection (3F)).

(3E) In subsection (3D) “a qualifying time” means—

(a) for the purposes of subsection (3), any time in the year mentioned in that subsection,

(b) for the purposes of subsection (3A), any time on or before the investment date,

(3F) For the purposes of this section if—

(a) a trade is transferred—

(i) to the relevant company,

(ii) to a company that is a 51% subsidiary of the relevant company, or

(iii) to a partnership of which a company within sub-paragraph (i) or (ii) is a member,

(including where it is transferred to a company within sub-paragraph (ii), or a partnership of which such a company is a member, before the company became such a subsidiary), and

(b) the trade, or a part of it, was previously (at any time) carried on by another person,

the trade or part mentioned in paragraph (b) becomes a “ relevant transferred trade ” at the time it is transferred as mentioned in paragraph (a).

(4) A “relevant investment” is made in a company if—

(a) an investment (of any kind) in the company is made by a VCT,

(b) the company issues shares (money having been subscribed for them), and (at any time) the company provides—

(i) a compliance statement under section 205 (enterprise investment scheme), or

(ii) a compliance statement under section 257ED (seed enterprise investment scheme),

in respect of the shares,...

(ba) an investment is made in the company and (at any time) the company provides a compliance statement under section 257PB (tax relief for social investments) in respect of the investment, or

(c) any other investment is made in the company which is aid received by it pursuant to a measure approved by the European Commission as compatible with Article 107 of the Treaty on the Functioning of the European Union in accordance with the principles laid down in the European Commission's Guidelines on State aid to promote risk finance investment (as those guidelines had effect at the time of the approval).

(5) For the purposes of subsections (2) to (3E), an investment within subsection (4)(b) is regarded as made when the shares are issued.

(6) Section 257KB applies in determining for those purposes when an investment within subsection (4)(ba) is made as it applies for the purposes of Part 5B (tax relief on social investments).

(7) If only a proportion of the money raised by a relevant investment is employed for the purposes of a trade which became a relevant transferred trade as mentioned in subsection (3D), only the corresponding proportion of the relevant investment falls within that subsection.

(8) For the purposes of this section—

(a) references to a trade include a part of a trade (and references to the carrying on of a trade are to be construed accordingly), and

(b) when determining the amount of money raised by a relevant investment which has been employed for the purposes of a trade such apportionments are to be made as are just and reasonable.

(9) In this section “trade” includes—

(a) any business or profession,

(b) so far as not within paragraph (a), the carrying on of research and development activities from which it is intended a trade will be derived or will benefit, and

292B

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299A

(1) The relevant holding must not have been issued, nor any money raised by the issue employed, in consequence or anticipation of, or otherwise in connection with, disqualifying arrangements.

(2) Arrangements are “disqualifying arrangements” if—

(a) the main purpose, or one of the main purposes, of the arrangements is to secure—

(i) that a qualifying activity is or will be carried on by the relevant company or a qualifying 90% subsidiary of that company, and

(ii) that shares or securities issued by the relevant company may be comprised in any company's qualifying holdings or that one or more persons may obtain relevant tax relief in respect of such shares which raise money for the purposes of that qualifying activity,

(b) that qualifying activity is the relevant qualifying activity by reference to which the requirement in section 293(1)(b) (money raised to be employed within two years for relevant qualifying activity) is met in relation to the relevant holding, and

(3) Condition A is that, as a (direct or indirect) result of the money raised by the issue of the relevant holding being employed as required by section 293(1)(b), an amount representing the whole or the majority of the amount raised is, in the course of the arrangements, paid to or for the benefit of a relevant person or relevant persons.

(4) Condition B is that, in the absence of the arrangements, it would have been reasonable to expect that the whole or greater part of the component activities of the relevant qualifying activity would have been carried on as part of another business by a relevant person or relevant persons.

(5) For the purposes of this section it is immaterial whether the relevant company is a party to the arrangements.

(6) In this section—

“component activities” means—if the relevant qualifying activity is within section 291(2), the carrying on of a qualifying trade which constitutes that activity, andif the relevant qualifying activity is within section 291(3), the preparations to carry on a qualifying trade which constitute that activity;

“arrangements” includes any scheme, agreement, understanding, transaction or series of transactions (whether or not legally enforceable);

“relevant person” means a person who is a party to the arrangements or a person connected with such a party;

“qualifying activity” has the same meaning as in section 291;

“relevant tax relief”, in respect of shares, means one or more of the following—relief under Chapter 6 of Part 4 (losses on disposal of shares) in respect of the shares; EIS relief (within the meaning of Part 5) in respect of the shares;SEIS relief (within the meaning of Part 5A) in respect of the shares; SI relief (within the meaning of Part 5B) in respect of the shares; relief under section 150A or 150E of TCGA 1992 (enterprise investment scheme and seed enterprise investment scheme) in respect of the shares;relief under Schedule 5B to that Act in consequence of which deferral relief is attributable to the shares;relief under Schedule 5BB to that Act (seed enterprise investment scheme: re-investment) in consequence of which SEIS re-investment relief is attributable to the shares (see paragraph 4 of that Schedule).

309A

(1) This section supplements section 303(1)(ka).

(2) Electricity is exported if it is exported onto a distribution system or transmission system (within the meaning of section 4 of the Electricity Act 1989).

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(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

312A

(1) Subsection (2) applies if an officer of Revenue and Customs has reason to believe that the relevant company has issued the relevant holding to the investing company in consequence of or, or otherwise in connection with, disqualifying arrangements (within the meaning of section 299A(2)).

(2) The officer may by notice require any person concerned to supply the officer within such time as may be specified in the notice with—

(a) a declaration in writing stating whether or not, according to the information which that person has or can reasonably obtain, such arrangements exist or have existed, and

(b) such other information as the officer may reasonably require for the purposes of section 299A and as that person has or can reasonably obtain.

(3) The period specified in a notice under subsection (2) must be at least 60 days.

(4) A “person concerned” means—

(a) the relevant company,

(b) the investing company,

(d) any person whom the officer has reason to believe is or was a party to the arrangements in question.

Follow-on funding

Qualifying holdings: introduction

The risk-to-capital requirement

Repayment of loan capital during 5 year period

Film partnerships

Business investment relief

809VA

(1) Subsection (2) applies if—

(a) a relevant event occurs,

(b) but for subsection (2), income or chargeable gains of an individual would be regarded as remitted to the United Kingdom by virtue of that event, and

(2) The income or gains are to be treated as not remitted to the United Kingdom.

(3) A “relevant event” occurs if money or other property—

(a) is used by a relevant person to make a qualifying investment, or

(b) is brought to or received in the United Kingdom in order to be used by a relevant person to make a qualifying investment.

(4) Subsection (1)(b) includes a case where income or gains would be treated under section 809Y as remitted to the United Kingdom by virtue of the relevant event.

(5) Subsection (2) applies by virtue of subsection (3)(b) to the extent only that the investment is made within the period of 45 days beginning with the day on which the money or other property is brought to or received in the United Kingdom.

(6) Where some but not all of the money or other property is used to make the investment within that 45-day period, the part of the income or gains to which subsection (2) applies is to be determined on a just and reasonable basis.

(7) Subsection (2) does not apply if the relevant event occurs, or the investment is made, as part of or as a result of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.

(8) A claim for relief under this section must be made on or before the first anniversary of the 31 January following the tax year in which the income or gains would, but for subsection (2), be regarded as remitted to the United Kingdom by virtue of the relevant event.

809VB

(1) This section applies to any portion of the income or gains to which section 809VA(2) does not apply because the investment was not made within the period mentioned in section 809VA(5) (“the 45-day period”).

(2) That portion is to be treated as not remitted to the United Kingdom to the extent that the remaining money or other property is taken offshore within the 45-day period.

(3) Where some but not all of the remaining money or other property is taken offshore within the 45-day period, the part of the income or gains to which subsection (2) applies is to be determined on a just and reasonable basis.

(4) If any remaining money or other property is taken offshore within the 45-day period, nothing in subsection (2) prevents anything subsequently done in relation to it (or anything deriving from it) from counting as a remittance of the underlying income or gains to the United Kingdom at the time when the thing is subsequently done.

(5) A reference to the “remaining” money or other property is to so much of the money or other property brought to or received in the United Kingdom as is not used within the 45-day period to make the investment (which may in some cases be all of it).

809VC

(1) For the purposes of section 809VA, a person makes an investment if—

(a) shares in a company are issued to or acquired by the person, or

(b) the person makes a loan (secured or unsecured) to a company.

(2) The company is referred to as “the target company”.

(3) The shares or the person's rights under the loan (or both) forming the subject of the investment are referred to as “the holding”.

(4) The investment counts as a “qualifying investment” if —

(a) the investment is made before 6 April 2028,

(b) none of the money or other property used to make the investment is TRF capital, and

(5) Conditions A and B are defined in sections 809VD and 809VF.

(6) A reference in this section to “shares” includes any securities.

(7) If a loan agreement authorises a company to draw down amounts of a loan over a period of time—

(a) entry into the agreement does not count for the purposes of this section as the making of a loan, but

(b) a separate loan is to be treated as made each time an amount is drawn down under the agreement.

(8) Accordingly—

(a) a separate investment is treated as made each time an amount is drawn down under the agreement, and

(b) the reference in subsection (3) to the person's rights under the loan applies only to so much of the person's rights as relate to the drawdown of that particular amount.

809VD

(1) Condition A is that the target company is—

(a) an eligible trading company,

(b) an eligible stakeholder company, ...

(ba) an eligible hybrid company, or

(2) A company is an “eligible trading company” if—

(a) it is a private limited company,

(b) it carries on one or more commercial trades or is preparing to do so within the next 5 years, and

(c) carrying on commercial trades is all or substantially all of what it does (or of what it is reasonably expected to do once it begins trading).

(3) A company is an “eligible stakeholder company” if—

(a) it is a private limited company,

(b) it exists wholly for the purpose of making investments in eligible trading companies (ignoring any minor or incidental purposes), and

(3A) A company is an “eligible hybrid company” if—

(a) it is a private limited company,

(b) it is not an eligible trading company or an eligible stakeholder company,

(d) it holds one or more investments in eligible trading companies or is preparing to do so within the next 5 years, and

(e) carrying on commercial trades and making investments in eligible trading companies are all or substantially all of what it does (or of what it is reasonably expected to do once it begins operating).

(4) The references in subsections (3) and (3A) to making investments is to be read in accordance with section 809VC.

(5) A company is an “eligible holding company” if—

(a) it is a member of an eligible trading group or of an eligible group that is reasonably expected to become an eligible trading group within the next 5 years,

(b) an eligible trading company in the group is a 51% subsidiary of it, and

(c) if the ordinary share capital that it owns in the eligible trading company is owned indirectly, each intermediary in the series is also a member of the group.

(6) “Group” means a parent company and its 51% subsidiaries.

(7) “Parent company” means a company that—

(a) has one or more 51% subsidiaries, but

(b) is not itself a 51% subsidiary of any company.

(8) A group is an “eligible group” if the parent company and each of its 51% subsidiaries are private limited companies.

(9) A group is an “eligible trading group” if—

(a) it is an eligible group, and

(b) carrying on commercial trades is all or substantially all of what the group does (taking the activities of its members as a whole).

(10) The reference in subsection (5) to owning ordinary share capital indirectly is to be read in accordance with section 1155 of CTA 2010.

(11) A company is a “private limited company” if—

(a) it is a body corporate whose liability is limited,

(b) it is not a limited liability partnership, and

809VE

(1) Section 809VD is to be read in accordance with this section.

(2) A reference to a “trade” also includes—

(a) anything that is treated for corporation tax purposes as if it were a trade, and

(b) a business carried on for generating income from land (as defined in section 207 of CTA 2009).

(3) A trade is a “commercial trade” if it is conducted on a commercial basis and with a view to the realisation of profits.

(4) The carrying on of activities of research and development from which it is intended that a commercial trade will be derived, or will benefit, is to be treated as the carrying on of a commercial trade.

(5) But preparing to carry on activities within subsection (4) is not to be treated as the carrying on of a commercial trade.

(6) A company which is a partner in a partnership is not to be regarded as carrying on a trade carried on by the partnership.

809VF

(1) Condition B is that no relevant person has (directly or indirectly) obtained or become entitled to obtain any related benefit, and no relevant person expects to obtain any such benefit.

(2) A “benefit”—

(a) includes the provision of anything that would not be provided to the relevant person in the ordinary course of business, or would be provided but on less favourable terms, but

(b) does not include the provision of anything provided to the relevant person in the ordinary course of business and on arm's length terms.

(3) A benefit is “related” if—

(a) it is directly or indirectly attributable to the making of the investment (whether it is obtained before or after the investment is made), or

(b) it is reasonable to assume that the benefit would not be available in the absence of the investment.

(4) For the purposes of subsection (2)—

(a) a reference to the provision of anything is to the provision of anything in money or money's worth, including property, capital, goods or services of any kind, and

(b) “provision” includes any arrangement that allows a person to enjoy or benefit from the thing in question (whether temporarily or permanently).

809VG

(1) Subsection (2) applies if—

(a) income or chargeable gains are treated under section 809VA(2) as not remitted to the United Kingdom as a result of a qualifying investment,

(b) a potentially chargeable event occurs after the investment is made, and

(2) The affected income or gains are to be treated as having been remitted to the United Kingdom immediately after the end of the relevant grace period.

(3) Where the step required by section 809VI(2)(a) is not taken within the grace period allowed for that step, “the relevant grace period” is the grace period allowed for that step.

(4) Otherwise, “the relevant grace period” is the grace period allowed for the step required by section 809VI(1) or (2)(b).

(5) “The affected income or gains” means such portion of the income or gains mentioned in subsection (1)(a) as reflects the portion of the investment affected by the potentially chargeable event.

(6) The portion of the investment affected is—

(a) if the potentially chargeable event is a disposal of a part of the holding (or a part of the remaining holding), a portion equal to the portion of the holding (or remaining holding) being disposed of, and

(b) otherwise, the whole of the investment.

(6A) Where—

(a) the income or gains mentioned in subsection (1)(a) include amounts designated as TRF capital (in a tax year after the tax year in which the investment is made), and

(b) the portion of the investment affected is less than the whole of the investment,

so much of the affected income or gains as does not exceed the amounts designated is to be treated as being comprised of the TRF capital.

(6B) Where section 809VO (investments made from mixed funds) applies, subsection (8) of that section applies for the purposes of determining the composition of the amount of the affected income or gains that is not treated as being comprised of TRF capital (referred to as the “relevant affected income and gains” in that subsection) as a result of—

(a) subsection (6A) of this section not applying, or

(b) that subsection only applying to a part of the affected income or gains.

(7) Section 809VN (order of disposals etc) makes further provision for the purposes of this section.

(8) If a qualifying investment is made using the money or other property mentioned in section 809VA(3) together with other funds—

(a) that investment is to be treated as two separate investments, one made using the money or other property mentioned in section 809VA(3) and one made using the other funds, and

(b) references in the business investment provisions to “the investment” and “the holding” relate only to the investment made using the money or other property mentioned in section 809VA(3).

(9) If the potentially chargeable event mentioned in subsection (1)(b) is not the first such event to affect the investment, the income or gains mentioned in subsection (1)(a) do not include, as respects that investment—

(a) any part already treated under subsection (2) as remitted to the United Kingdom as a result of an earlier event,

(aa) any part contained in amounts already treated as remitted under section 809VIA(4) following an earlier event,

(b) any part contained in amounts already taken offshore or re-invested by way of appropriate mitigation steps following an earlier event, or

(c) any part contained in amounts already used to make a tax deposit without which an amount mentioned in paragraph (b) would not have been enough to satisfy section 809VI(1) or (2)(b) (see section 809VK).

809VH

(1) For the purposes of section 809VG, a “potentially chargeable event” occurs if—

(a) the target company is for the first time neither an eligible trading company nor an eligible stakeholder company nor an eligible hybrid company nor an eligible holding company,

(b) the relevant person who made the investment (“P”) disposes of all or part of the holding,

(d) the 5-year start-up rule is breached.

(2) The extraction of value rule is breached if—

(a) value (in money or money's worth) is received by or for the benefit of P or another relevant person,

(b) the value is received from any person in circumstances that are directly or indirectly attributable to the investment, and

(3) But the extraction of value rule is not breached merely because a relevant person receives value that—

(a) is treated for income tax or corporation tax purposes as the receipt of income or would be so treated if that person were liable to such tax, and

(b) is paid or provided to the person in the ordinary course of business and on arm's length terms.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) The 5-year start-up rule is breached if—

(a) immediately after the end of the period of 5 years beginning with the day on which the investment was made, the target company is non-operational, or

(b) at any time after the end of that period, the target company becomes non-operational.

(6) The target company is “non-operational” at any time when—

(a) it is an eligible trading company but is not trading,

(b) it is an eligible stakeholder company but—

(i) it holds no investments in eligible trading companies, or

(ii) none of the eligible trading companies in which it holds investments is trading, ...

(ba) it is an eligible hybrid company but is not trading and—

(i) it holds no investments in eligible trading companies, or

(ii) none of the eligible trading companies in which it holds investments is trading, or

(i) the group of which it is a member is not an eligible trading group, or

(ii) none of its 51% subsidiaries in the eligible trading group of which it is a member is an eligible trading company that is trading.

(7) In subsection (6), “trading” means carrying on one or more commercial trades (including the carrying on of any activities treated under section 809VE(4) as the carrying on of a commercial trade).

(8) If consideration for a disposal of all or part of the holding is or is to be paid in instalments, the disposal is to be treated for the purposes of this section as if it were separate disposals, one for each instalment (and each giving rise to a separate potentially chargeable event).

(9) An event listed in subsection (1) does not count as a potentially chargeable event if it is due to an insolvency step taken for genuine commercial reasons (but this does not prevent the extraction of any value in connection with the insolvency step from counting as a potentially chargeable event).

(10) For the purposes of subsection (9), an insolvency step is taken if—

(a) the target company enters into administration or receivership or is wound up or dissolved,

(b) the target company is an eligible stakeholder company or an eligible hybrid company and any eligible trading company in which it holds an investment enters into administration or receivership or is wound up or dissolved,

(c) the target company is an eligible holding company and any eligible trading company in the group that is a 51% subsidiary of it enters into administration or receivership or is wound up or dissolved, or

(d) a similar step is taken in relation to a company mentioned in paragraph (a), (b) or (c) under the law of a country or territory outside the United Kingdom.

809VI

(1) If the potentially chargeable event is a disposal of all or part of the holding, the appropriate mitigation steps are regarded as taken if the whole of the disposal proceeds have been taken offshore or re-invested.

(2) For any other case, the appropriate mitigation steps are regarded as taken if—

(a) P has disposed of the entire holding (or so much of it as P retains when the potentially chargeable event occurs), and

(b) the whole of the disposal proceeds have been taken offshore or re-invested.

(3) But —

(a) see also section 809VIA (which makes provision treating the disposal proceeds as reduced where TRF capital is involved), and

(b) if the disposal proceeds exceed X, subsections (1) and (2)(b) apply only to so much of the proceeds as is equal to X.

(4) “X” is—

(a) the sum originally invested, less

(b) so much of that sum as has, on previous occasions involving the same investment—

(i) been taken into account in determining the affected income or gains under section 809VG(2),

(ii) been taken offshore or re-invested in order to avoid the application of that section, or

(iii) been used to make a tax deposit without which the amount actually taken offshore or re-invested would not have been enough to satisfy subsection (1) or (2)(b) (see section 809VK).

(5) “The sum originally invested” means the amount of the money, or the market value of the other property, used to make the investment.

(6) Market value is to be assessed for these purposes as at the date of the relevant event (see section 809VA).

(7) Proceeds are “re-invested” if a relevant person uses them to make another qualifying investment (or the proceeds are themselves a qualifying investment) whether in the same or a different company.

(8) In cases where a breach of the extraction of value rule occurs in connection with the winding-up or dissolution of the target company—

(a) subsection (2)(a) does not apply,

(b) the reference in subsection (2)(b) to the disposal proceeds is to the value received, and

(c) references in this section and in succeeding provisions of the business investment provisions to the disposal proceeds are to be read as references to the value received.

809VJ

(1) The grace period allowed for the step mentioned in section 809VI(2)(a) is the period of 90 days beginning—

(a) if the potentially chargeable event is a breach of the extraction of value rule, with the day on which the value is received, and

(b) otherwise, with the day on which a relevant person first became aware or ought reasonably to have become aware of the potentially chargeable event.

(2) The grace period allowed for the step mentioned in section 809VI(1) and (2)(b) is the period of 45 days beginning with the day on which the disposal proceeds first became available for use by or for the benefit of P or any other relevant person.

(2A) But subsection (2B) applies instead of subsections (1) and (2) where the potentially chargeable event is a breach of the 5-year start-up rule by virtue of section 809VH(5)(b).

(2B) The grace period allowed for the steps mentioned in section 809VI(2)(a) and (2)(b) is the period of 2 years beginning with the day on which a relevant person first became aware or ought reasonably to have become aware of the potentially chargeable event referred to in subsection (2A).

(3) An officer of Revenue and Customs may agree in a particular case to extend the grace period allowed for an appropriate mitigation step in exceptional circumstances.

(4) An officer of Revenue and Customs may agree in a particular case to extend the grace period allowed for an appropriate mitigation step in circumstances specified in regulations made by the Commissioners.

(5) Regulations under subsection (4) may have effect in relation to investments made before the day on which the regulations are made.

(6) Nothing in subsection (4) or in regulations made under it limits the power conferred by subsection (3).

(7) The powers conferred on officers of Revenue and Customs by subsections (3) and (4) include power to agree to extend a grace period for a length of time that is indefinite but is capable of becoming definite by means identified in the agreement (such as the satisfaction of conditions).

809VK

(1) This section applies if—

(a) there is a disposal of all or part of the holding,

(b) the disposal counts as a potentially chargeable event or is part of the appropriate mitigation steps taken in consequence of a potentially chargeable event,

(d) P is chargeable to capital gains tax (but not corporation tax) in respect of that gain, and

(e) the actual disposal proceeds are less than Y.

(2) The difference between the actual disposal proceeds and Y is referred to in this section as “the shortfall”.

(3) “The actual disposal proceeds” means the disposal proceeds but disregarding section 809Z8(4).

(4) “Y” is the sum of—

(a) the amount (if any) that would, but for this section, be required to be taken offshore or re-invested in order to satisfy section 809VI(1) or (2)(b), and

(b) the amount found by applying the highest potential CGT rate to the amount (computed in accordance with TCGA 1992) of the chargeable gain accruing to P on the disposal.

(5) The highest potential CGT rate is the highest rate specified in section 1H of TCGA 1992 (regardless of the type of the chargeable gain or, if P is an individual, the rate of income tax at which P's income is chargeable).

(6) If this section applies, the amount that is required to be taken offshore or re-invested in order to satisfy section 809VI(1) or (2)(b) is reduced by the permitted amount.

(7) “The permitted amount” is so much of the shortfall as is used, within the grace period allowed for taking the disposal proceeds offshore or re-investing them, to make a deposit in respect of which a certificate of tax deposit is issued to P under section 12 of the National Loans Act 1968.

(8) A reduction may not be made under subsection (6) unless—

(a) when details of the deposit are confirmed to Her Majesty's Revenue and Customs, the confirmation letter states that this section is intended to apply to the deposit, and

(b) the amount of the deposit is no greater than the shortfall.

809VL

(1) This section explains the effect for the purposes of this Chapter in cases where section 809VG(2) does not apply because the appropriate mitigation steps were taken within the grace period allowed for each step.

(2) If disposal proceeds were taken offshore as part of those steps, nothing in section 809VA(2) prevents anything subsequently done in relation to those proceeds (or anything deriving from them) from counting as a remittance of the underlying income or gains to the United Kingdom at the time when the thing is subsequently done.

(3) If disposal proceeds were re-invested as part of those steps—

(a) the underlying income or gains continue to be treated under section 809VA(2) as not remitted to the United Kingdom, and

(b) the business investment provisions apply to the re-investment as they apply to the original investment.

(4) In the application of the business investment provisions to the re-investment—

(a) treat the potentially chargeable event mentioned in section 809VG(1)(b) as the relevant event,

(b) treat the underlying income or gains as the income or gains treated under section 809VA(2) as not remitted to the United Kingdom as a result of the re-investment, and

(5) If the re-investment is made using more than the minimum amount of disposal proceeds required to satisfy section 809VI(1) or (2)(b)—

(a) that investment is to be treated as two separate investments, one made using the minimum amount of disposal proceeds and one made using the excess, and

(b) references in the business investment provisions to “the investment” and “the holding” relate only to the investment made using the minimum amount of disposal proceeds.

(6) “The underlying income or gains” means the affected income or gains (within the meaning of section 809VG) or, if one part of the disposal proceeds is taken offshore and the other part re-invested, a corresponding proportion of the affected income or gains.

(7) A further claim must be made in accordance with section 809VA in respect of the re-investment and, if no such claim is made on or before the first anniversary of the 31 January following the tax year in which the re-investment was made, section 809VG(2) applies, as respects the original investment, as if the appropriate mitigation steps had not been taken within the grace period allowed for each step.

(8) Section 809VM makes further provision in cases involving a tax deposit.

809VM

(1) This section applies in cases where—

(a) section 809VG(2) did not apply because the appropriate mitigation steps were taken within the grace period allowed for each step,

(b) the amount required to be taken offshore or re-invested in order to satisfy section 809VI(1) or (2)(b) had been reduced under section 809VK, and

(c) but for that reduction, the amount that was actually taken offshore or re-invested would not have been enough to satisfy section 809VI(1) or (2)(b).

(2) The tax deposit that gave rise to the reduction is referred to in this section as “the tax deposit”.

(3) Use of the tax deposit to pay the relevant tax liability does not count as remitting the underlying income or gains to the United Kingdom (and, accordingly, section 809VA(2) continues to apply to the income or gains).

(4) If any of the CTD conditions is breached, the underlying income or gains are to be treated as having been remitted to the United Kingdom immediately after the day on which the breach occurs.

(5) “The underlying income or gains” means such portion of the affected income or gains (within the meaning of section 809VG) as is—

(a) represented by the payment, in the case of subsection (3), or

(b) affected by the breach, in the case of subsection (4).

(6) The CTD conditions are as follows—

(a) the tax deposit must not be used to pay a tax liability other than the relevant tax liability,

(b) if any of the tax deposit is withdrawn by the depositor, the amount withdrawn must be taken offshore or re-invested within the period of 45 days beginning with the day on which the withdrawal was made, and

(c) any part of the tax deposit that has been neither used to pay a tax liability nor withdrawn by the due date must be withdrawn by the depositor and taken offshore or re-invested within the period of 45 days beginning with that date.

(7) Where the CTD conditions were not breached because the requisite amount was taken offshore or re-invested within the 45-day period mentioned in subsection (6)(b) or (c)—

(a) section 809VL applies to the amount taken offshore or re-invested as it applies to disposal proceeds, but

(b) read the reference in section 809VL(4)(a) to the potentially chargeable event as a reference to—

(i) the withdrawal, in a case within subsection (6)(b), and

(ii) the due date, in a case within subsection (6)(c).

(8) For the purposes of this section—

(a) “the relevant tax liability” means P's liability to capital gains tax for the tax year in which the disposal took place,

(b) “the due date” means the date by which the relevant tax liability is required to be paid,

(d) references to withdrawal include repayment for whatever reason.

809VN

(1) Subsection (2) applies if at any time income or chargeable gains of an individual are treated under section 809VA as not remitted to the United Kingdom as a result of—

(a) more than one qualifying investment made in the same target company,

(b) more than one qualifying investment made in companies in the same eligible trading group, or

(c) qualifying investments made in an eligible trading company and in an eligible stakeholder company or eligible hybrid company that holds investments in that trading company.

(2) In the application of section 809VG at that time—

(a) treat the investments and holdings as if they were a single qualifying investment and a single holding, and

(b) assume that a disposal of all or part of that deemed single holding affects the deemed single investment in the following order.

(2A) The order is—

(a) so much of the qualifying investments as were made using money or other property that is designated as TRF capital (in a tax year after the tax year in which the investment is made) to the extent those qualifying investments were made using that money or other property, and then

(b) in relation to whatever remains, the order in which the qualifying investments were made (that is to say, on a first in, first out basis).

(3) Subsection (4) applies if at any time—

(a) income or chargeable gains of an individual are treated under section 809VA as not remitted to the United Kingdom as a result of one or more qualifying investments,

(b) in addition to that investment or those investments, a relevant person holds at least one other investment in the same target company, the same eligible trading group or a related eligible company, and

(4) In the application of section 809VG at that time—

(a) treat the investments and holdings as if they were a single investment and a single holding, and

(b) assume that a disposal of all or part of that deemed single holding is—

(i) a disposal of so much of the deemed single holding as is from any qualifying investments that were made using money or other property that is designated as TRF capital (in a tax year after the tax year in which the investment is made) to the extent those qualifying investments were made using that money or other property, and

(ii) if any of the deemed single holding remains after the disposal referred to in sub-paragraph (i), a disposal of a holding from qualifying investments until the holdings from all the qualifying investments have been disposed of.

(5) The reference to a “related eligible company”—

(a) in relation to an eligible trading company, is to an eligible stakeholder company or eligible hybrid company that holds investments in that company, and

(b) in relation to an eligible stakeholder company or eligible hybrid company, is to an eligible trading company in which that company holds investments.

(6) Subsections (2) and (4) apply whether the investments in question are held by the same relevant person or different ones.

809VO

(1) This section applies if—

(a) but for section 809VA(2), income or gains would have been remitted to the United Kingdom by virtue of a relevant event, and

(b) section 809Q (transfers from mixed funds) would have applied in determining the amount that would have been so remitted.

(2) The relevant event counts as an offshore transfer for the purposes of section 809R(4).

(3) The holding is to be treated as containing a proportion of each kind of income and capital contained in the invested property equal to the fixed proportion.

(4) The “fixed proportion” is, unless subsection (4B) applies, the proportion of that kind of income or capital contained in the invested property by virtue of subsection (2).

(4A) Subsection (4B) applies, instead of subsection (3), for determining the composition of the holding in connection with the application of subsections (7) and (8) where the holding contains TRF capital (as a result of the designation of income or capital in the holding as TRF capital in the tax year after the tax year in which the relevant event occurred).

(4B) Where this subsection applies, take the following steps to determine the composition of the holding in connection with the application of those subsections—

Step 1Determine the amounts of each kind of income and capital that the holding was treated as containing by virtue of subsection (3).

Step 2Reduce the amount of each kind of income and capital by the amount (if any) of that income or capital as is TRF capital.

(4C) Where subsection (4B) applies, the “fixed proportion” is the proportion of that kind of income or capital treated as contained in the invested property by virtue of that subsection (instead of subsection (2)).

(5) “The invested property” means the money or other property used to make the investment.

(6) Subsection (7) applies in cases where—

(a) section 809VG(2) does not apply because an amount is taken offshore, re-invested or used to make a tax deposit, or

(b) section 809VM(4) does not apply because an amount is taken offshore or re-invested.

(7) The amount taken offshore, re-invested or used to make a tax deposit is treated, immediately after that step, as containing the fixed proportion (determined under subsection (4) or (4C) as the case may be) of each kind of income and capital contained in the holding.

(8) In cases where section 809VG(2) applies—

(a) the relevant affected income or gains are so much of the fixed amount of each kind of income or gain mentioned in subsection (1)(a) as reflects the relevant proportion of the portion of the investment affected by the potentially chargeable event (see section 809VG(6)),

(b) “the fixed amount” is the amount of that kind of income or gain that the holding is treated as containing by virtue of subsection (3) or (4B) (as the case may be), and

(8A) For the purposes of subsection (8)(a)—

(a) the “relevant affected income or gains” means—

(i) in a case where section 809VG(6A) applies to treat some of the affected income or gains as being comprised of TRF capital, so much of the affected income or gains as is not treated as being comprised of TRF capital, or

(ii) otherwise, all of the affected income or gains, and

(b) the “relevant proportion” of the portion of the investment means—

(i) in a case where section 809VG(6A) applies to treat some of the affected income or gains as being comprised of TRF capital, the proportion of the portion of the investment that is equal to the proportion of the affected income or gains as is not treated as being comprised of TRF capital, or

(ii) otherwise, the whole of the portion of the investment.

(9) Section 809R(2) and (3) and section 809S apply for the purposes of this section.

Relief for certain UK services

Exempt property relief

809YA

(1) Section 809Y(1) does not apply to property if—

(a) it ceases to be exempt property because the whole of it is sold whilst it is in the United Kingdom, and

(b) conditions A to F are met.

(2) Condition A is that the sale is to a person other than a relevant person.

(3) Condition B is that the sale is by way of a bargain made at arm's length.

(4) Condition C is that, once the sale is completed, no relevant person—

(a) has any interest in the property,

(b) is able or entitled to benefit from the property by virtue of any interest, right or arrangement, or

(c) has any right (whether conditional or unconditional) to acquire any interest mentioned in paragraph (a) or ability or entitlement mentioned in paragraph (b).

(5) Condition D is that the whole of the disposal proceeds are released (whether in one go or in instalments) on or before the final deadline.

(6) “The final deadline” is the first anniversary of the 5 January following the tax year in which the property ceases to be exempt property (within the meaning of section 809Y).

(7) Condition E is that—

(a) the whole of the disposal proceeds are taken offshore or used by a relevant person to make a qualifying investment within the period of 45 days beginning with the day on which the proceeds are released, or

(b) if the disposal proceeds are paid in instalments, each instalment is taken offshore or used by a relevant person to make a qualifying investment within the period of 45 days beginning with the day on which the instalment is released.

(8) But if any of the disposal proceeds are released in the period of 45 days ending with the final deadline, Condition E is satisfied, as respects those proceeds, only if they are taken offshore or used by a relevant person to make a qualifying investment on or before the final deadline.

(9) Condition F is that, if Condition E is satisfied wholly or in part by using disposal proceeds to make a qualifying investment, the remittance basis user makes a claim for relief under section 809YC(2) on or before the first anniversary of the 31 January following the tax year in which the property is sold.

(10) For the purposes of this section, proceeds or instalments are “released” on the day on which they first become available for use by or for the benefit of any relevant person.

(11) This section does not apply if the sale is made as part of or as a result of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.

809YB

(1) An officer of Revenue and Customs may agree in a particular case to extend any period within which disposal proceeds (or instalments) must be taken offshore or used by a relevant person to make a qualifying investment in order to satisfy Condition E.

(2) The power to agree to an extension is exercisable only in exceptional circumstances and only if the remittance basis user requests such an extension.

809YC

(1) This section has effect if section 809Y(1) does not apply to property by virtue of section 809YA.

(2) The income and gains treated under section 809X as not remitted to the United Kingdom continue to be treated after the sale as not remitted to the United Kingdom even though the property has ceased to be exempt property.

(3) But nothing in subsection (2) prevents anything done in relation to any part of the disposal proceeds after that part is taken offshore (or used to make a qualifying investment) from counting as a remittance of the underlying income or gains to the United Kingdom at the time when the thing is done.

(4) Treat the disposal proceeds as containing or deriving from an amount of each kind of income and gain mentioned in section 809Q(4)(a) to (h) equal to the amount of that kind of income or gain contained in the exempt property when it was brought to, or received or used in, the United Kingdom (as mentioned in section 809X).

(5) Where Condition E was met by using the disposal proceeds to make a qualifying investment—

(a) the business investment provisions apply to the income and gains that continue, by virtue of subsection (2), to be treated as not remitted as they apply to income or gains that are treated under section 809VA(2) as not remitted, and

(b) if the investment was made using more than just the disposal proceeds, treat only the part of the investment made using the disposal proceeds as “the investment” for the purposes of those provisions.

809YD

(1) This section applies to an individual (“P”) if—

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