Finance Act 2014

(257QG) In sections 257Q, 257QA, 257QB, 257QE and 257QF— (a) any reference to a payment or transfer to the investor includes a reference to a payment or transfer made to the investor indirectly or to the investor's order or for the investor's benefit, (b) any reference to the investor includes a reference to an associate of the investor, and (c) any reference to the social enterprise includes a reference to a person who at any time in the longer applicable period is connected with the social enterprise (whether or not that person is so connected at the material time). (257QH) (1) If— (a) any SI relief attributable to the investment would, in the absence of this section, be reduced or withdrawn under section 257Q because of a receipt of value within section 257QE(2) or (6) (“the original value”), (b) the original supplier receives value (“the replacement value”) from the original recipient and the receipt is a qualifying receipt, and (c) the amount of the replacement value is at least the amount of the original value, section 257Q does not, because of the receipt of the original value, have effect to withdraw or reduce the SI relief. This is subject to section 257QI(1) and (2). (2) For the purposes of this section— - “the original recipient” means the person who receives the original value, and - “the original supplier” means the person from whom that value was received. (3) If the amount of the original value is, by virtue of section 257QB, treated as reduced for the purposes of section 257Q(2) as it applies in relation to the investment, the reference in subsection (1)(c) to the amount of the original value is to be read as a reference to the amount of that value ignoring the reduction. (4) A receipt of the replacement value is a qualifying receipt for the purposes of subsection (1) if it arises— (a) because of the original recipient doing one or more of the following— (i) making a payment to the original supplier, other than a payment within paragraph (c) or a payment to which subsection (5) applies, (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, and (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, (b) if the receipt of the original value was within section 257QE(2)(d), because of an event the effect of which is to reverse the event which constituted the receipt of the original value, or (c) if the receipt of the original value was within section 257QE(6), because of the original recipient repurchasing the investments in question, or (as the case may be) re-acquiring the right in question, for a consideration the amount or value of which is at least the amount of the original value. (5) This subsection applies to— (a) any payment for any goods, services or facilities, provided (whether in the course of trade or otherwise) by— (i) the original supplier, or (ii) any other person who at any time in the longer applicable period is an associate of, or is connected with, the original supplier (whether or not the person is such an associate, or is 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 any money lent to— (i) the original recipient, or (ii) any other person who at any time in the longer applicable period is an associate of the original recipient (whether or not the person is such an associate at the material time), (c) any payment for the acquisition of an asset which does not exceed its market value, (d) any payment, as rent for any property occupied by— (i) the original recipient, or (ii) any person who at any time in the longer applicable period is an associate of the original recipient (whether or not the person is such an associate at the material time), of an amount not exceeding a reasonable and commercial rent for the property, (e) any payment in discharge of an ordinary trade debt, and (f) any payment for shares in or securities of any company in circumstances that do not fall within subsection (4)(a)(ii). (6) For the purposes of this section, the amount of the replacement value is— (a) in a case within paragraph (a) of subsection (4), the sum 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, (b) in a case within subsection (4)(b), the same as the amount of the original value, and (c) in a case within subsection (4)(c), the amount or value of the consideration received by the original supplier. Section 257QF applies for the purpose of determining the amount of the original value. (7) In this section— (a) any reference to a payment to a person (however expressed) includes a reference to a payment made to the person indirectly or to the person's order or for the person's benefit, and (b) “ordinary trade debt” has the meaning given by section 257QE(9). (257QI) (1) The receipt of the replacement value by the original supplier is ignored for the purposes of section 257QH(1) to the extent to which it has previously been set under section 257QH against a receipt of value to prevent any reduction or withdrawal of SI relief under section 257Q. (2) The receipt of the replacement value by the original supplier (“the event”) is ignored for the purposes of section 257QH if— (a) the event occurs before the longer applicable period, (b) where the event occurs after the time the original recipient receives the original value, it does not occur as soon after that time as is reasonably practicable in the circumstances, or (c) where an appeal has been brought by the investor against an assessment to withdraw or reduce any SI relief attributable to the investment because of the receipt of the original value, the event occurs more than 60 days after the day on which the amount of the relief which falls to be withdrawn has been finally determined. But nothing in section 257QH or this section requires the replacement value to be received after the original value. (3) This subsection applies if— (a) the receipt of the replacement value by the original supplier is a qualifying receipt for the purposes of section 257QH(1), and (b) in consequence of the receipt, any receipts of value are ignored for the purposes of section 257Q as that section applies in relation to the investment or any other investments made by the investor, and (c) the event which gives rise to the receipt is (or includes) the making of an investment by— (i) the investor, or (ii) any person who at any time in the longer applicable period is an associate of the investor (whether or not the person is such an associate at the material time). (4) If subsection (3) applies, the person who makes the investment concerned is not to be eligible for SI relief in relation to the investment concerned or any other investments in the same issue. (5) In this section “the original recipient”, “the original supplier” and “replacement value” have the same meaning as in section 257QH. (257QJ) (1) This section applies if any SI relief is attributable to the whole or any part of the investment and, at any time in the longer applicable period, the social enterprise or any subsidiary— (a) repays, redeems or repurchases any of its share capital which belongs to any member other than— (i) the investor, or (ii) a person who falls within subsection (5), or (b) makes any payment to any such member for giving up the member's right to any of the share capital of the social enterprise or subsidiary on its cancellation or extinguishment. (2) The SI relief must— (a) if it is greater than the amount given by the formula set out in subsection (3), be reduced by that amount, and (b) in any other case, be withdrawn. (3) The formula is— $$A × R$where—A is the amount received by the member, andR is the SI rate for the tax year for which the SI relief was given.$ (4) This section is subject to sections 257QK to 257QP; and sections 257QL to 257QO are to be applied in the order in which they appear in this Part. (5) A person falls within this subsection if the repayment causes any SI relief attributable to that person's shares in the social enterprise to be withdrawn or reduced by virtue of— (a) section 257QE(2)(a) (receipt of value by virtue of repayment of investments etc), or (b) section 257R (disposal of whole or part of the investment). (6) A repayment is treated as having the effect mentioned in subsection (5)(a) if it would have that effect were it not an insignificant receipt; and here “insignificant receipt” is to be read in accordance with section 257QA(1). (7) A repayment is to be ignored, for the purposes of this section, to the extent to which SI relief attributable to any shares has already been withdrawn or reduced on its account. (8) In this section and sections 257QK to 257QP— (a) “repayment” means a repayment, redemption, repurchase or payment mentioned in subsection (1)(a) or (b), and (b) references to a subsidiary of the social enterprise are references to a company which at any time in the longer applicable period is a 51% subsidiary of the social enterprise (whether or not it is such a subsidiary at the time of the repayment). (257QK) (1) A repayment is ignored for the purposes of section 257QJ if both— (a) the market value of the shares to which it relates (“the target shares”) immediately before the event occurs, and (b) the amount received by the member in question, are insignificant in relation to the market value of the remaining issued share capital of the social enterprise, or (as the case may be) the subsidiary, immediately after the event occurs. This is subject to subsection (3). (2) For the purposes of subsection (1) it is to be assumed that the target shares are cancelled at the time the repayment is made. (3) Subsection (1) does not apply if repayment arrangements are in existence at any time in the period— (a) beginning 12 months before the investment date, and (b) ending at the end of the investment date. (4) For this purpose “repayment arrangements” means arrangements which provide— (a) for a repayment by the social enterprise or any subsidiary of the social enterprise (whether or not it is such a subsidiary at the time the arrangements are made), or (b) for anyone to be entitled to such a repayment, at any time in the longer applicable period. (257QL) (1) This section applies if, in relation to the same repayment, section 257QJ(2) applies to SI relief attributable to two or more issues of shares. (2) Section 257QJ(3) has effect in relation to the shares included in each of those issues as if the amount referred to as A were reduced by multiplying it by the fraction— $$I T$where—I is the amount on which SI relief was obtained by individuals in respect of shares which are included in the issue and to which SI relief is or, but for section 257QJ(2)(b), would be attributable, andT is the total of that amount and the corresponding amount or amounts in respect of the other issue or issues.$ (257QM) (1) This section applies if, in relation to the same repayment, section 257QJ(2) applies to SI relief attributable to shares held by two or more individuals. (2) Section 257QJ(3) has effect in relation to each individual as if the amount referred to as A were reduced by multiplying it by the fraction— $$I T$where—I is the amount on which the individual obtains SI relief in respect of the shares to which SI relief is or, but for section 257QJ(2)(b), would be attributable, andT is the total of that amount and the corresponding amount or amounts on which the other individual or individuals obtain SI relief in respect of such shares.$ (257QN) (1) This section applies if— (a) section 257QJ(2) applies to SI relief attributable to shares held by an individual, and (b) part of the issue of shares has been treated as issued to the individual in a previous tax year for the purposes of section 257JA(1) and (2). (2) This subsection explains how the calculation under section 257QJ(3) is to be made. - Step 1 Apportion the amount referred to as A between the tax year in which the shares were issued and the previous tax year by multiplying that amount by the fraction—$I T$where—I is the amount on which the individual obtains SI relief in respect of the shares treated as issued in the tax year in question, andT is the total of that amount and the corresponding amount in respect of the shares treated as issued in the other tax year. - Step 2 In relation to each of the amounts (“A1” and “A2”) so apportioned to the two tax years, calculate the amounts (“X1” and “X2”) that would be given by the formula if there were separate issues of shares in those tax years. In calculating amounts X1 and X2, apply section 257QO if appropriate but do not apply section 257QL or 257QM. - Step 3 Add amounts X1 and X2 together. The result is the required amount. (257QO) (1) This section applies if section 257QJ(2) applies to SI relief attributable to shares held by the investor and— (a) the amount of the reduction (“D”) in the investor's liability to income tax for any tax year in respect of the shares, is less than (b) the amount given by— $$I × R$where—I is the amount on which the investor claims SI relief in respect of the investment, andR is the SI rate for the tax year for which the SI relief was given.$ (2) Section 257QJ(3) has effect as if the amount referred to as A were reduced by multiplying it by the fraction— $D I × R$ (3) If the amount of SI relief attributable to any of the shares has been reduced before the SI relief was obtained, the amount referred to in subsections (1) and (2) as D is to be treated for the purposes of those subsections as the amount it would have been without that reduction. (4) Subsection (3) does not apply to a reduction of SI relief by virtue of section 257N(5) (attribution of SI relief where there is a corresponding issue of bonus shares). (257QP) (1) This section applies if— (a) a company issues share capital (“the original shares”) of nominal value equal to the authorised minimum (within the meaning of the Companies Act 2006) for the purposes of complying with section 761 of that Act (public company: requirement as to minimum share capital), and (b) the registrar of companies issues the company with a certificate under that section. (2) Section 257QJ(2) does not apply in relation to any redemption of the original shares within 12 months of the date on which they were issued. (257QQ) (1) Any SI relief attributable to the investment is withdrawn if— (a) at any time in the longer applicable period, the social enterprise or any qualifying subsidiary— (i) begins to carry on as its trade, or as part of its trade, a trade which was previously carried on at any time in that period otherwise than by the social enterprise or any qualifying subsidiary, or (ii) acquires the whole, or the greater part, of the assets used for the purposes of a trade previously so carried on, and (b) the investor is a person, or one of a group of persons, to whom subsection (2) or (3) applies. (2) This subsection applies to any person or group of persons— (a) to whom an interest amounting in total to more than a half share in the trade (as previously carried on) belonged at any time in the longer applicable period, and (b) who is or are a person or group of persons to whom such an interest in the trade carried on by the social enterprise belongs or has, at any such time, belonged. (3) This subsection applies to any person or group of persons who— (a) control or, at any time in the longer applicable period, have controlled the social enterprise, and (b) is or are a person or group of persons who, at any such time, controlled another company which previously carried on the trade. (4) For the purposes of subsection (2)— (a) for the purpose of determining the person to whom a trade belongs and, if a trade belongs to two or more persons, their respective shares in that trade— (i) apply section 941(6) of CTA 2010, and (ii) an interest in a trade belonging to a company may be treated in accordance with any of the options set out in section 942 of that Act, and (b) any interest, rights or powers of a person who is an associate of another person are treated as those of that other person. (5) If the investor— (a) is a director of, or of a company which is a partner of, the social enterprise or any qualifying subsidiary, and (b) is in receipt of, or entitled to receive, remuneration as such a director falling within section 257LF(5)(g) (reasonable remuneration for services), then, in determining whether any SI relief attributable to the investment is to be withdrawn, the reference in subsection (3)(b), and (so far as relating to that provision) the reference in subsection (1)(a)(i), to any time in the longer applicable period are to be read as references to any time before the end of the longer applicable period. (6) Section 257LF(8) (director also an employee) applies for the purposes of subsection (5) as it applies for the purposes of section 257LF, and in subsection (5) “remuneration” includes any benefit or facility. (7) In this section “trade” includes any business or profession, and references to a trade previously carried on include references to part of such a trade. (257QR) (1) Any SI relief attributable to the investment is withdrawn if— (a) the social enterprise comes to acquire all of the issued share capital of another company at any time in the longer applicable period, and (b) the investor is a person, or one of a group of persons, to whom subsection (2) applies. (2) This subsection applies to any person or group of persons who— (a) control or have, at any time in the longer applicable period, controlled the social enterprise, and (b) is or are a person or group of persons who, at any such time, controlled the other company. (3) If the investor— (a) is a director of, or of a company which is a partner of, the social enterprise or any qualifying subsidiary, and (b) is in receipt of, or entitled to receive, remuneration as such a director falling within section 257LF(5)(g) (reasonable remuneration for services), then, in determining whether any SI relief attributable to the investment is to be withdrawn, the reference in subsection (2)(b) to any time in the longer applicable period is to be read as a reference to any time before the end of the longer applicable period. (4) Section 257LF(8) (director also an employee) applies for the purposes of subsection (3) as it applies for the purposes of section 257LF, and in subsection (3) “remuneration” includes any benefit or facility. (257QS) (1) Any SI relief obtained by the investor which is subsequently found not to have been due must be withdrawn. (2) SI relief obtained by the investor in respect of the investment may not be withdrawn on the ground that the requirements of Chapter 4 are not met unless the requirements of subsection (3) are met. (3) The requirements of this subsection are met if either— (a) the social enterprise has given notice under section 257SF in relation to the investment (information to be provided by the social enterprise etc), or (b) an officer of Revenue and Customs has given notice to the social enterprise stating the officer's opinion that, because of the ground in question, the whole or any part of the SI relief attributable to the investment (whether alone or with other SI relief) was not due. (257R) (1) This section applies if— (a) the investor disposes of the whole or part of the investment, (b) the disposal takes place before the shorter applicable period ends, (c) SI relief is attributable to the shares, or qualifying debt investments, disposed of, (d) the disposal is not to an individual who— (i) is the spouse, or civil partner, of the investor, and (ii) is living together with the investor at the time of the disposal, and (e) the disposal does not occur as a result of the investor's death. (2) If the disposal is not made by way of a bargain at arm's length, the SI relief attributable to those shares, or qualifying debt investments, must be withdrawn. (3) If the disposal is made by way of a bargain at arm's length, the SI relief attributable to those shares or qualifying debt investments must— (a) if it is greater than the amount given by the formula set out in subsection (4), be reduced by that amount, and (b) in any other case, be withdrawn. (4) The formula is— $$C × R$where—C is the amount or value of the consideration received by the investor for the shares or qualifying debt investments, andR is the SI rate for the tax year for which the SI relief was given.$ (257RA) (1) Subsection (2) applies if the investor's liability to income tax for any tax year is reduced under this Part in respect of the investment and— (a) the amount of the reduction (“D”), is less than (b) the amount given by— $$A × R$where—A is the amount on which the investor claims SI relief in respect of the investment, andR is the SI rate for that tax year.$ (2) Section 257R(3) and (4) have effect as if the amount or value referred to as C were reduced by multiplying it by the fraction— $D A × R$ (3) If section 257JA(1) and (2) apply in the case of the investment as if part of it had been made in a previous tax year, subsections (1) and (2) of this section have effect as if that part and the remainder had been invested by separate investments (and that part had been invested by an investment made on a day in the previous tax year). (4) If the amount of SI relief attributable to the investment or any part of it has been reduced before SI relief was obtained, the amount referred to in subsections (1) and (2) as D is to be treated for the purposes of those subsections as the amount that it would have been without that reduction. (5) Subsection (4) does not apply to a reduction of SI relief by virtue of section 257N(5) (attribution of SI relief if there is a corresponding issue of bonus shares). (257RB) (1) This section applies if the investor grants an option which, if exercised, would bind the investor to sell the whole or part of investment. (2) The grant of the option is treated for the purposes of section 257R as a disposal— (a) of the investment, or (b) (as the case may be) of the part of the investment to which the option relates. (3) Nothing in this section prejudices section 257LB (no pre-arranged exits). (257RC) (1) This section applies if, at any time in the longer applicable period, a person grants the investor an option which, if exercised, would bind the grantor to purchase the whole or part of the investment. (2) Any SI relief— (a) attributable to the investment, or (b) (as the case may be) attributable to the part of the investment to which the option relates, must be withdrawn. (3) For the purposes of subsection (2)(b), the part of the investment to which an option relates is the part which, if— (a) the option were exercised immediately after the grant, and (b) any investments made in the social enterprise by the investor after the grant were disposed of immediately after being made, would be treated for the purposes of section 257R as disposed of in pursuance of the option. (257S) If any SI relief which has been obtained falls to be withdrawn or reduced under Chapter 7, it must be withdrawn or reduced by the making of an assessment to income tax for the tax year for which the relief was obtained. (257SA) For the purposes of the provisions of TMA 1970 relating to appeals, the giving of notice by an officer of Revenue and Customs under section 257QS(3)(b) is taken to be a decision disallowing a claim by the social enterprise. (257SB) (1) An officer of Revenue and Customs may— (a) make an assessment for withdrawing or reducing the SI relief attributable to whole or any part of the investment, or (b) give a notice under section 257QS(3)(b), at any time not more than 6 years after the end of the relevant tax year. (2) In subsection (1) “the relevant tax year” means— (a) the tax year containing the end of the 28 months beginning with the investment date, or (b) if later, the tax year in which occurs the event which causes the SI relief to be withdrawn or reduced. (3) Subsection (1) is without prejudice to section 36(1A) of TMA 1970 (loss of tax brought about deliberately etc). (257SC) (1) No assessment for withdrawing or reducing SI relief in respect of the investment may be made because of an event occurring after the investor's death. (2) Subsection (3) applies if the investor has, by a disposal or disposals to which section 257R(3) applies, disposed of all investments which— (a) have been made by the investor in the social enterprise, and (b) are investments— (i) to which SI relief is attributable, or (ii) have not been held by the investor until the end of the third anniversary of the date on which they were made. (3) No assessment for withdrawing or reducing SI relief in respect of those investments may be made because of any subsequent event unless the event occurs at a time when the requirements of sections 257LF, 257LG and 257LH are not met in relation to the investor by reference to any of those investments. (257SD) (1) In its application to an assessment made by virtue of section 257S in the case of relief withdrawn or reduced by virtue of a provision listed in subsection (2), section 86 of TMA 1970 (interest on overdue income tax) has effect as if the relevant date were 31 January next following the tax year for which the assessment is made. (2) The provisions are— - section 257LD, - any of sections 257LF to 257LH, - any of sections 257M to 257MJ, - section 257MN, - section 257Q, - section 257QJ, - section 257QQ, - section 257QR - section 257R, and - section 257RC. (257SE) (1) This section applies if the investor has obtained SI relief in respect of the investment, and an event occurs as a result of which— (a) the SI relief falls to be withdrawn or reduced by virtue of any of sections 257LD, 257LF, 257LG and 257LH, (b) the SI relief falls to be withdrawn or reduced under section 257Q (receipt of value), or would fall to be so withdrawn or reduced but for section 257QH (receipt of replacement value), or (c) the SI relief falls to be withdrawn or reduced under any of sections 257R, 257RB and 257RC (disposals and options). (2) The investor must within 60 days of coming to know of the event give a notice to an officer of Revenue and Customs containing particulars of the event. (3) If the investor— (a) is required under this section to give notice of a receipt of value which is within section 257Q, or would be within that section but for section 257QH, and (b) has knowledge of any replacement value received (or expected to be received) because of a qualifying receipt, the notice must include particulars of that receipt (or expected receipt). (4) In subsection (3) “qualifying receipt” and “replacement value” are to be read in accordance with section 257QH. (257SF) (1) This section applies if the social enterprise has provided an officer of Revenue and Customs with a compliance statement in respect of the investment and an event occurs as a result of which— (a) any of the requirements in sections 257M, 257MC to 257MK, 257MM(1) and 257MN is not met in respect of the investment, or (b) any of sections 257Q, 257QJ, 257QQ and 257QR has effect to cause any SI relief attributable to the investment to be withdrawn or reduced, or— (i) would have such an effect if SI relief had been obtained in respect of the investment, or (ii) in the case of section 257Q, would have such an effect but for section 257QH (receipt of replacement value). (2) If this section applies— (a) the social enterprise, and (b) any person connected with the social enterprise who has knowledge of the matters mentioned in subsection (1), must give a notice to an officer of Revenue and Customs containing particulars of the event. (3) Any notice required to be given by the social enterprise under subsection (2)(a) must be given— (a) within 60 days of the event, or (b) if the event is a receipt of value within section 257QE(2) from a person connected with the social enterprise (see section 257QG), within 60 days of the social enterprise coming to know of the event. (4) Any notice required to be given by a person under subsection (2)(b) must be given within 60 days of the person coming to know of the event. (5) If a person— (a) is required under this section to give notice of a receipt of value which is within section 257Q, or would be within that section but for section 257QH, and (b) has knowledge of any replacement value received (or expected to be received) because of a qualifying receipt, the notice must include particulars of that receipt of replacement value (or expected receipt). (6) In subsection (5) “qualifying receipt” and “replacement value” are to be read in accordance with section 257QH. (7) If the event mentioned in subsection (1) is one whose occurrence results in the requirement in section 257M not being met in respect of the investment, the references in subsections (2) and (3) to the social enterprise are to— (a) the body concerned even though it has ceased to be a social enterprise, or (b) the body into which the social enterprise has been converted. (257SG) (1) This section applies if an officer of Revenue and Customs has reason to believe that a person— (a) has not given a notice which the person is required to give under section 257SE or 257SF in respect of any event, (b) has given or received value within the meaning of section 257QE(2) or (6) which, but for the fact that the amount given or received was an insignificant receipt, would have triggered a requirement to give such a notice, or (c) has made or received any repayment within the meaning given by section 257QJ(8) which, but for the fact that it falls to be ignored for the purposes of section 257QJ by virtue of section 257QK(1), would have triggered a requirement to give a notice under section 257SF. (2) The officer may by notice require the person concerned to supply the officer, within such time as the officer may specify in the notice, with such information relating to the event as the officer may reasonably require for the purposes of this Part. (3) The period specified in a notice under subsection (2) must be at least 60 days. (4) In subsection (1)(b) the reference to an insignificant receipt is to be read in accordance with section 257QA(1). (257SH) (1) Subsection (2) applies if SI relief is claimed in respect of the investment, and an officer of Revenue and Customs has reason to believe that it may not be due because of any such arrangements as are mentioned in section 257LB(1), 257LC, 257LE, 257LH, 257ME(3), 257MK(2) or (4), 257MM(5) or (6), 257MN(5), 257MU or 257MV(1), (5), (6) or (7). (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, any such arrangements exist or have existed, and (b) such other information as the officer may reasonably require for the purposes of the provision in question 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) For the purposes of subsection (2), in the case of a provision listed in column 1 of the following table, the person concerned is given by the corresponding entry in column 2 of the table.

References in the table to the investor include references to any person to whom the investor appears to have made such a transfer as is mentioned in section 257T (spouses or civil partners) of the whole or part of the investment.

(5) If SI relief has been obtained in respect of the investment— (a) any person who receives from the social enterprise any payment or asset which may constitute value received (by the person or another) for the purposes of section 257Q, and (b) any person on whose behalf such a payment or asset is received, must, if so required by an officer of Revenue and Customs, state whether the payment or asset so received is received on behalf of any other person and, if so, the name and address of that other person. (6) If SI relief has been claimed in respect of the investment— (a) any person who holds or has held investments in the social enterprise, and (b) any person on whose behalf any such investments are or were held, must, if so required by an officer of Revenue and Customs, state whether the investments so held are or were held on behalf of any other person and, if so, the name and address of that other person. (257SI) (1) Section 18(1) of the Commissioners for Revenue and Customs Act 2005 does not prevent an officer of Revenue and Customs from disclosing to the social enterprise that SI relief has been obtained or claimed in respect of a particular number or proportion of any investments in it. (2) Section 18(1) of the Commissioners for Revenue and Customs Act 2005 does not prevent— (a) disclosure to the Regulator of Community Interest Companies for the purposes of the Regulator's functions, (b) disclosure to a Minister of the Crown for the purposes of functions of a Minister of the Crown under sections 257JD to 257JG, or (c) disclosure to a person for the purposes of functions delegated to the person under section 257JH(1). (3) Information disclosed in reliance on subsection (2) may not be further disclosed except— (a) with the consent of the Commissioners for Her Majesty's Revenue and Customs, or (b) if the disclosure is required by an enactment. (4) Information originally disclosed in reliance on subsection (2)(a) may be disclosed in reliance on subsection (3)(a) only for the purposes of the Regulator's functions. (5) Information originally disclosed in reliance on subsection (2)(b) or (c) may be disclosed in reliance on subsection (3)(a) only for the purposes of— (a) functions of a Minister of the Crown under sections 257JD to 257JG, or (b) functions delegated to a person under section 257JH(1). (6) If, in contravention of subsections (3) to (5), any revenue and customs information relating to a person is disclosed and the identity of the person— (a) is specified in the disclosure, or (b) can be deduced from it, section 19 of the Commissioners for Revenue and Customs Act 2005 (offence of wrongful disclosure) applies as it applies in relation to a disclosure of such information in contravention of section 20(9) of that Act. (7) In subsection (6) “revenue and customs information relating to a person” has the meaning given by section 19(2) of that Act. (8) Subject to subsections (3) and (5), no obligation as to confidentiality or other restriction on disclosure, whether imposed by an enactment or otherwise, prevents disclosure of relevant information— (a) to a Minister of the Crown for the purposes of functions of a Minister of the Crown under sections 257JD to 257JG, (b) to a person for the purposes of functions delegated to the person under section 257JH(1), or (c) to an officer of Revenue and Customs for the purpose of assisting Her Majesty's Revenue and Customs to discharge their functions under the Income Tax Acts so far as relating to matters arising under this Part. (9) In subsection (8) “relevant information” means information obtained— (a) by a Minister of the Crown, or (b) by a person to whom functions have been delegated under section 257JH(1), in the course of discharging functions under sections 257JD to 257JG. (10) In this section “Minister of the Crown” has the meaning given by section 8(1) of the Ministers of the Crown Act 1975. (257T) (1) This section applies if— (a) the investor transfers the whole or part of the investment to another individual (“B”) during their lives, (b) the investor was married to, or was the civil partner of, B at the time of the transfer, and (c) section 257R does not apply to the transfer. (2) This Part (including subsection (1)) has effect, in relation to any subsequent disposal or other event, as if— (a) B were the investor as respects the transferred stake, (b) B's liability to income tax had been reduced in respect of the transferred stake for the same tax year as that for which the investor's was so reduced, (c) the amount by which B's liability to income tax had been reduced in respect of the transferred stake were the same as that by which the investor's liability had been so reduced, and (d) the same amount of SI relief had continued to be attributable to the transferred stake despite the transfer. (3) If the amount of SI relief attributable to the transferred stake had been reduced before the relief was obtained by the investor— (a) this Part has effect, in relation to any subsequent disposal or other event, as if the amount of SI relief attributable to the transferred stake had been correspondingly reduced before the relief was obtained by B, and (b) section 257QD(2), 257QO(3) and 257RA(4) apply in relation to B as they would have applied in relation to the investor. (4) If, because of any such disposal or other event, an assessment for reducing or withdrawing SI relief is to be made, the assessment is to be made on B. (257TA) (1) The rules in subsections (2) and (3) are for determining which investments of any class are treated as disposed of for the purposes of— (a) section 257R (disposal of the investment), or (b) section 257T (spouses or civil partners), if the investor disposes of some but not all of the investments of that class which the investor holds in the social enterprise. (2) Investments made on an earlier day are treated as disposed of before investments made on a later day. (3) Investments made on the same day are treated as disposed of in the following order— (a) first, any to which neither SI relief nor hold-over relief is attributable, (b) next, any to which hold-over relief, but not SI relief, is attributable, (c) next, any to which SI relief, but not hold-over relief, is attributable, and (d) finally, any to which both SI relief and hold-over relief are attributable. (4) Any investments within paragraph (c) or (d) of subsection (3) which are treated by section 257N(7) as issued on an earlier day are treated as disposed of before any other investments falling within that paragraph of subsection (3). (5) The following— (a) any investments to which SI relief is attributable and which were transferred to an individual as mentioned in section 257T, and (b) any investments to which hold-over relief, but not SI relief, is attributable and which were acquired by an individual on a disposal to which section 58 of TCGA 1992 applies, are treated for the purposes of subsections (2) and (3) as acquired by the individual on the day on which they were made. (6) 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. (7) In this section— - “hold-over relief” means relief under Schedule 8B to TCGA 1992; - “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). (257TB) (1) References in this Part to a company being “in administration” or “in receivership” are to be read as follows. (2) A company is “in administration” if— (a) it is in administration within the meaning of Schedule B1 to the Insolvency Act 1986 or Schedule B1 to the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)), or (b) there is in force in relation to it under the law of a country or territory outside the United Kingdom any appointment corresponding to an appointment of an administrator under either of those Schedules. (3) A company is “in receivership” if there is in force in relation to it— (a) an order for the appointment of an administrative receiver, a receiver and manager or a receiver under Chapter 1 or 2 of Part 3 of the Insolvency Act 1986 or Part 4 of the Insolvency (Northern Ireland) Order 1989, or (b) any corresponding order under the law of a country or territory outside the United Kingdom. (257TC) (1) In this Part “associate”, in relation to a person, means— (a) any relative or partner of the person, (b) the trustee or trustees of any settlement in relation to which the person, or any relative of the person (living or dead), is or was a settlor, and (c) if the person has an interest in any shares or obligations of a company which are subject to any trust or are part of the estate of a deceased person— (i) the trustee or trustees of the settlement concerned or, as the case may be, the personal representatives of the deceased, and (ii) if the person is a company, any other company which has an interest in those shares or obligations. (2) In this section “relative” means spouse, civil partner, ancestor or lineal descendant. (257TD) (1) In this Part “control” is to be read in accordance with sections 450 and 451 of CTA 2010 but as if “company” in those sections included a charity that is a trust. (2) For the purposes of this Part, a charity that is a trust has “control” of another person if, as a result of the operation of subsection (1), the trustees (in their capacity as trustees of the trust) have, or any of them has, control of the person. (3) A person has “control” of a charity that is a trust if— (a) the person is a trustee of the charity and some or all of the powers of the trustees of the charity could be exercised by— (i) the person acting alone, or (ii) by the person acting together with any other persons who are trustees of the charity and who are connected with the person, (b) the person, alone or together with other persons, has power to appoint or remove a trustee of the charity, or (c) the person, alone or together with other persons, has any power of approval or direction in relation to the carrying-out by the trustees of any of their functions. (4) Subsection (3) is in addition to, and does not limit, subsection (1); and both of those subsections are subject to subsection (5). (5) For the purposes of this Part, a regulator is to be treated as not having control of any company regulated by the regulator. (6) Section 995 of this Act (control) does not apply for the purposes of this Part. (257TE) (1) In this Part— - “arrangements” (except as used, in sections 257LB and 257QK, in the expressions “issuing arrangements” and “repayment arrangements”) includes any scheme, arrangement or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions, - “bonus shares” means shares which are issued otherwise than for payment (whether in cash or otherwise), - “compliance statement” has the meaning given by section 257PB, - “director”— 1. is read in accordance with section 452 of CTA 2010 but as if “company” in that section included a charity that is a trust, and 2. in relation to a charity that is a trust (but subject to section 257LF(9)), includes (in particular) each trustee of the trust, - “disposal”, in relation to any shares or other investments, includes disposal of an interest or right in or over them, - “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, - “qualifying subsidiary” has the meaning given by section 257MU, and - “single company” means a company that does not have any qualifying subsidiaries. (2) 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.

PART 2 — Consequential amendments

2

• (1) Section 98 of TMA 1970 (penalties) is amended as follows.

• (2) In column 1 of the Table, after the entry for sections 257GG and 257GH(1) and (2) of ITA 2007, insert—

• (3) In column 2 of the Table, after the entry for sections 257GE and 257GF of ITA 2007, insert—

3

ITA 2007 is amended as follows.

4

In section 2 (overview of Act) after subsection (5A) insert—

(5B) Part 5B is about relief for social investments.

5

In section 24A(7)(d) (share loss relief on the disposal of certain investments not subject to the limit on deductions imposed by section 24A) after sub-paragraph (ii) insert

, or (iii) where SI relief is attributable to the shares in question as determined in accordance with Part 5B (income tax relief for social investments).

6

In section 26(1)(a) (provisions giving rise to deductions at Step 6 of the calculation in section 23) after the entry for Chapter 1 of Part 5A of ITA 2007 insert— “ Chapter 1 of Part 5B (relief for social investments), ”.

7

In section 27(5) (order in which certain tax reductions are to be made) after the entry for Chapter 1 of Part 5A of ITA 2007 insert— “ Chapter 1 of Part 5B (relief for social investments), ”.

8

In section 29(4B) (limit on certain tax reductions) after the entry for Chapter 1 of Part 5 of ITA 2007 insert— “ Chapter 1 of Part 5B (relief for social investments), ”.

9

In section 32 (liabilities to income tax not dealt with in the calculation under Chapter 3 of Part 2) after the entry for section 257G of ITA 2007 insert— “ under section 257S (withdrawal or reduction of relief for social investments), ”.

10

In section 392 (loan to buy interest in close company) after subsection (3) insert—

(3A) Subsection (2) does not apply if at any time the individual by whom the shares are acquired or the money is lent, or that individual's spouse or civil partner, makes— (a) a claim under Part 5B of this Act for relief in respect of the amount invested in acquiring the shares or (as the case may be) in return for the debentures in respect of the money lent, or (b) a claim in respect of the amount under Schedule 8B to TCGA 1992 (hold-over relief for gains re-invested in social enterprises). (3B) For the purposes of subsection (3A)(a) “debenture” includes any instrument creating or acknowledging indebtedness.

11

In section 416 (gift aid: meaning of “qualifying donation”) after subsection (6) insert—

(6A) Condition EA is that the payment is not by way of, and does not amount in substance to, waiver by the individual of entitlement to sums (whether of principal or return) due to the individual from the charity in respect of an amount— (a) advanced to the charity, and (b) in respect of which a person, whether or not the individual, has obtained relief under Part 5B (relief for social investments).

12

In section 1014(5)(b) (orders and regulations not subject to negative procedure) after sub-paragraph (iii) insert—

(iiia) section 257MB (amendment of Part 5B: amounts that may be raised from social investments; and State aid),

.

13

In section 1022 (meaning of “debenture”) after subsection (1) insert—

(1A) For the meaning of “debenture” in sections 257KB(3) to (5), 257L(4), 257LA(2) and 392(3A)(a), see also sections 257KB(6), 257L(6), 257LA(4) and 392(3B).

SCHEDULE 12

1

TCGA 1992 is amended as follows.

2

After section 255 insert—

(255A) Schedule 8B to this Act (which provides relief in respect of gains re-invested in social enterprises) has effect. (255B) (1) For the purpose of determining the gain or loss on any disposal of an asset by an individual where— (a) an amount of SI relief is attributable to the asset, and (b) apart from this subsection there would be a loss, treat the consideration given by the individual for the acquisition of the asset as reduced by the amount of the SI relief. (2) If— (a) an individual disposes of an asset, (b) an amount of SI relief is attributable to the asset, (c) the disposal takes place after the end of the 3 years beginning with the day when the individual acquired the asset, and (d) apart from this subsection, there would be a gain on the disposal, the gain is not a chargeable gain, subject to section 255C. (3) Despite section 16(2), subsection (2) above does not apply to a disposal on which a loss accrues. (4) Any question as to— (a) which of any assets acquired by an individual at different times a disposal relates to, being assets to which SI relief is attributable, or (b) whether a disposal relates to assets to which SI relief is attributable or to other assets, is to be determined for the purposes of capital gains tax as provided by section 257TA of ITA 2007. (5) Chapter 1 of this Part has effect subject to subsection (4). (6) Sections 104, 105 and 106A do not apply to assets to which SI relief is attributable. (7) There are to be made all such adjustments of capital gains tax, whether by way of assessment or by way of discharge or repayment of tax, as may be required in consequence of SI relief being given or withdrawn. (8) In this section and sections 255C to 255E “SI relief” means relief under Part 5B of ITA 2007 (income tax relief for investments in social enterprises). (9) That Part applies for the purposes of this section and sections 255C to 255E to determine whether SI relief is attributable to any asset and, if so, the amount of SI relief so attributable. (255C) (1) Subsection (2) applies if— (a) an individual's liability to income tax has been reduced (or treated by virtue of section 257T of ITA 2007 (spouses or civil partners) as reduced) for any tax year under section 257JA of ITA 2007 (SI relief) in respect of the acquisition of an asset, (b) the amount of the reduction (“D”) is less than the amount given by— $$I × R$where—I is the amount on which the individual has SI relief in the case of the asset, andR is the SI rate for the tax year for which the SI relief was obtained, and$ (c) D is not within paragraph (b) solely by virtue of section 29(2) and (3) of ITA 2007. (2) If the individual disposes of the asset and there is a gain on the disposal, section 255B(2) has effect in relation to the gain as if it were reduced by multiplying it by— $D I × R$ (3) In this section “SI rate” has the meaning given by section 257JA(5) of ITA 2007. (255D) (1) Subsection (2) applies if before a disposal of an asset— (a) value is received in circumstances where SI relief attributable to the asset is reduced by an amount under section 257Q(1)(a) of ITA 2007, or (b) there is a repayment, redemption, repurchase or payment in circumstances where SI relief attributable to the asset is reduced by an amount under section 257QJ(2)(a) of ITA 2007, or (c) paragraphs (a) and (b) both apply. (2) If section 255B(2) applies on the disposal but section 255C does not, section 255B(2) applies only to so much of the gain as remains after deducting so much of it as is found by multiplying it by the fraction— $$A B$where—A is equal to the amount by which the SI relief given in respect of the asset is reduced as mentioned in subsection (1) above, andB is equal to the amount of the SI relief given in respect of the asset.$ (3) If sections 255B(2) and 255C apply on the disposal, section 255B(2) applies only to so much of the gain as is found by— (a) taking the part of the gain found under section 255C, and (b) deducting from that part so much of it as is found by multiplying it by the fraction mentioned in subsection (2). (4) If the SI relief given in respect of the asset is reduced as mentioned in subsection (1) by more than one amount, the amount referred to as A in subsection (2) is to be taken to be equal to the aggregate of those amounts. (5) The amount referred to in subsection (2) as B is to be found without regard to any reduction mentioned in subsection (1). (255E) (1) Subsection (2) applies if an individual holds shares which form part of the ordinary share capital of a company and include shares of more than one of the following kinds— (a) shares to which SI relief is attributable and to which subsection (3) applies, (b) shares to which SI relief is attributable and to which subsection (3) does not apply, and (c) shares to which SI relief is not attributable and to which subsection (3) does not apply. (2) If there is a reorganisation within the meaning of section 126 affecting the shares listed in subsection (1), section 127 applies separately to those shares so that shares of each kind are treated as a separate holding of original shares and identified with a separate new holding. (3) This subsection applies to any shares if— (a) expenditure on the shares has been set under Schedule 8B to this Act against the whole or part of any gain, and (b) in relation to the shares there has been no chargeable event for the purposes of that Schedule. (4) If— (a) an individual holds shares (“the existing holding”) which form part of the ordinary share capital of a company, (b) there is, by virtue of any such allotment for payment as is mentioned in section 126(2)(a), a reorganisation affecting the existing holding, and (c) immediately following the reorganisation, SI relief is attributable to the existing holding or the allotted shares, sections 127 to 130 do not apply in relation to the existing holding. (5) Subject to subsection (6), sections 135 and 136 do not apply in respect of shares to which SI relief is attributable. (6) Subsection (5) does not have effect to disapply section 135 or 136 in a case where the original shares are shares to which SI relief is attributable if— (a) the new holding consists of new ordinary shares which meet conditions A and B of section 257L of ITA 2007, (b) the new shares are issued after the end of three years beginning with the day on which the original shares were acquired, (c) before issuing the new shares, the company had issued shares which met conditions A and B of section 257L of ITA 2007, and (d) the company issued a compliance certificate in relation to those earlier shares for the purposes of section 257PA(1) of ITA 2007 and in accordance with sections 257PB and 257PC of ITA 2007. (7) In subsection (6) “new holding” is to be construed in accordance with sections 126, 127, 135 and 136. (8) In this section— - “ordinary share capital” has the meaning given in section 989 of ITA 2007; - “ordinary shares”, in relation to a company, means shares forming part of its ordinary share capital.

3

Before Schedule 9 insert—

SCHEDULE 8B (1) (1) This Schedule applies if— (a) a chargeable gain accrues to an individual (“the investor”), (b) the investor acquires one or more assets (“the social holding”), (c) the investor is eligible for SI relief under Part 5B of ITA 2007 in respect of the consideration given for the social holding, and (d) conditions A, B, C, D and E are met. (2) Condition A is that the gain is one that accrues— (a) on the disposal by the investor of an asset, (b) in accordance with section 169N (but see sub-paragraph (7)), or (c) as a result of the operation of paragraph 5 in connection with a chargeable event within paragraph 6(1)(c) or (d). (3) Condition B is that the gain is one that accrues— (a) on or after 6 April 2014, and (b) before 6 April 2019 (but see sub-paragraph (8)). (4) Condition C is that the investor is resident in the United Kingdom— (a) when the gain accrues, and (b) when the social holding is acquired. (5) Condition D is that the social holding is acquired by the investor on the investor's own behalf. (6) Condition E is that the social holding is acquired— (a) in the 3 years beginning with the day when the gain accrues, or (b) in the year that ends at the beginning of that day. (7) The reference in sub-paragraph (2)(b) to a gain accruing in accordance with section 169N does not include such a gain so far as it is chargeable to capital gains tax at the rate in section 169N(3) (rate where entrepreneurs' relief is available). (8) The Treasury may by order substitute a later date for the date for the time being specified in sub-paragraph (3)(b). (2) (1) This Schedule also applies if— (a) a chargeable gain accrues to an individual (“the investor”), (b) the gain accrues as a result of the operation of paragraph 5 in connection with a chargeable event within paragraph 6(1)(a), (b) or (c), (c) the chargeable event is either— (i) a disposal to a social enterprise of shares in or debentures of the social enterprise, or (ii) the cancellation, extinguishment, redemption or repayment by a social enterprise of shares in or debentures of the social enterprise, (d) as part of the chargeable event or in connection with it, and in place of the shares or debentures, the investor acquires one or more assets (“the social holding”) from the social enterprise, (e) other than the investor's ceasing to hold the shares or debentures, no detriment is suffered in return for the acquisition of the social holding, (f) the asset acquired, or each of the assets acquired, is a share in or debenture of the social enterprise, (g) but for section 257LA of ITA 2007 (consideration for acquisition must be wholly in cash and fully paid) the investor would be eligible for SI relief under Part 5B of ITA 2007 in respect of the consideration given for the social holding, and (h) conditions F, G, H and J are met. (2) Condition F is that the gain is one that accrues— (a) on or after 6 April 2014, and (b) before 6 April 2019 (but see sub-paragraph (6)). (3) Condition G is that the investor is resident in the United Kingdom— (a) when the gain accrues, and (b) when the social holding is acquired. (4) Condition H is that the social holding is acquired by the investor on the investor's own behalf. (5) Condition J is that the social holding is acquired— (a) in the 3 years beginning with the day when the gain accrues, or (b) in the year that ends at the beginning of that day. (6) The Treasury may by order substitute a later date for the date for the time being specified in sub-paragraph (2)(b). (7) In this paragraph “debenture” includes any instrument creating or acknowledging indebtedness. (8) A reference in this paragraph to a social enterprise is a reference to a body that is a social enterprise for the purposes of Part 5B of ITA 2007 (see section 257J of that Act). (3) (1) In the following provisions of this Schedule— - “the amount invested” means, in a case where this Schedule applies because of paragraph 1, the consideration mentioned in paragraph 1(1)(c), - “the investor” means the individual mentioned in paragraph 1(1)(a) or, as the case may be, paragraph 2(1)(a), - “the original gain” means the chargeable gain mentioned in paragraph 1(1)(a) or, as the case may be, paragraph 2(1)(a), and - “the social holding” means the asset or assets mentioned in paragraph 1(1)(b) or, as the case may be, paragraph 2(1)(d). (2) In this Schedule, a “disposal within marriage or civil partnership” is a disposal to which section 58 (certain disposals between spouses or civil partners) applies. (4) (1) The investor may make a claim for the original gain to be reduced— (a) in a case within paragraph 1, by the amount invested, or by a part of that amount specified in the claim, or (b) in a case within paragraph 2, to the extent specified in the claim, but, in either case, subject as follows. (2) The reduction may not be more than the original gain or, if the original gain has already been reduced under one or more of the listed provisions, the reduction may not be more than the reduced gain. (3) In a case within paragraph 1, the claim may not relate to any part of the amount invested that under any of the listed provisions has already been set against a chargeable gain. (4) The “listed provisions” are— (a) sub-paragraph (1), (b) Schedule 5B, and (c) paragraph 1(5) of Schedule 5BB. (5) The total of all reductions claimed by the investor under sub-paragraph (1) in any tax year must not be more than £1,000,000. (6) If there is relief by way of a reduction under sub-paragraph (1) then, for the purposes of this Schedule, that relief— (a) is attributable to the asset or assets that form the social holding, but (b) ceases to be attributable to any particular asset, or to any particular part of a particular asset, when— (i) a chargeable event occurs in relation to that asset or part, or (ii) the person holding the asset or part dies. (5) (1) This paragraph applies if there has been a reduction under paragraph 4(1). (2) A chargeable gain equal to the amount of the reduction is treated as accruing when a chargeable event occurs in relation to the social holding without any chargeable event having previously occurred in relation to any of the holding. (3) When a chargeable event occurs in relation to part only of the social holding without any chargeable event having previously occurred in relation to any of that part, a chargeable gain calculated in accordance with sub-paragraph (4) is treated as accruing. (4) The calculation is— - Step 1 Subtract from the amount of the reduction any chargeable gains previously treated as accruing as a result of the operation of sub-paragraph (3). - Step 2 Attribute a proportionate part of the amount calculated at Step 1 to each part of the social holding held, immediately before the occurrence of the chargeable event in question, by the investor or a person who has acquired any part of the holding from the investor on a disposal within marriage or civil partnership. - Step 3 The amount attributed at Step 2 to the part of the social holding in relation to which that chargeable event occurs is the chargeable gain treated as accruing as a result of the operation of subparagraph (3) on the occurrence of that event. (6) (1) A chargeable event occurs in relation to an asset that forms the whole or any part of the social holding if (after the acquisition of the holding)— (a) the investor disposes of the asset otherwise than by way of a disposal within marriage or civil partnership, (b) the asset is disposed of, otherwise than by way of a disposal to the investor, by a person who acquired the asset on a disposal made within marriage or civil partnership, (c) the asset is cancelled, extinguished, redeemed or repaid, or (d) any of the conditions in Chapters 3 and 4 of Part 5B of ITA 2007 for the investor's eligibility for SI relief under that Part in respect of the amount invested fails to be met. In this sub-paragraph “asset” includes part of an asset. (2) In the event of the death of— (a) the investor, or (b) a person who, on a disposal within marriage or civil partnership, has acquired the whole or any part of the social holding, nothing which occurs at or after the time of death is a chargeable event in relation to any part of the holding held by the deceased person immediately before the time of death. (3) If a person makes a disposal of assets of a particular class while retaining other assets of that class— (a) assets of that class acquired by the person on an earlier day are treated for the purposes of this Schedule as disposed of before assets of that class acquired by the person on a later day, and (b) assets of that class acquired by the person on the same day are treated for the purposes of this Schedule as disposed of in the following order— (i) first, any to which neither relief under this Schedule, nor SI relief under Part 5B of ITA 2007, is attributable, (ii) next, any to which relief under this Schedule, but not SI relief under that Part, is attributable, (iii) next, any to which SI relief under that Part, but not relief under this Schedule, is attributable, and (iv) finally, any to which both SI relief under that Part, and relief under this Schedule, are attributable. (4) For the purposes of sub-paragraph (3), assets— (a) to which relief under this Schedule is attributable, and (b) which have not been held continuously by the investor since the social holding was acquired, are treated as having been acquired when the social holding was acquired if SI relief under Part 5B of ITA 2007 is not also attributable to them. (5) For the purposes of sub-paragraph (3), assets— (a) to which SI relief under Part 5B of ITA 2007 is attributable, and (b) which were transferred to an individual as mentioned in section 257T of ITA 2007 (transfers between spouses or civil partners), are treated as having been acquired when the social holding was acquired. (6) Chapter 1 of Part 4 of this Act has effect subject to sub-paragraphs (3) to (5). (7) Sections 104, 105 and 106A do not apply to assets to which relief under this Schedule is attributable if SI relief under Part 5B of ITA 2007 is not also attributable to them. (8) Where, at the time of a chargeable event, an asset that formed the whole or any part of the social holding is treated for the purposes of this Act as represented by assets which consist of or include assets other than that asset— (a) so much of the original gain as is attributable to the asset is treated, in determining for the purposes of this paragraph the amount of the original gain to be treated as attributable to each of those assets, as apportioned in such manner as may be just and reasonable between those assets, and (b) as between different assets treated as representing the same asset, sub-paragraphs (3) to (5) apply with the necessary modifications in relation to those assets as they would apply in relation to the asset. (9) In order to determine, for the purposes of sub-paragraph (8), the amount of the original gain attributable to any asset, a proportionate part of the amount of the original gain is to be attributed to each asset that forms the whole or any part of so much of the social holding as is held, immediately before the occurrence of the chargeable event in question, by the investor or a person who has acquired any part of the social holding from the investor on a disposal within marriage or civil partnership. (10) In subsections (8) and (9) references to the original gain are to so much of the original gain as remains after deduction from it of the amount of any chargeable gain treated as accruing as a result of the previous operation of paragraph 5. (7) (1) This paragraph applies where a chargeable gain is treated as accruing as a result of the operation of paragraph 5. (2) If the chargeable event is a disposal, that chargeable gain is treated as accruing to the person who makes the disposal. (3) If the chargeable event occurs— (a) when an asset, or part of an asset, is cancelled, extinguished, redeemed or repaid, or (b) when a condition, for eligibility for relief in respect of the consideration given for the acquisition of an asset, fails to be met, that chargeable gain is treated as accruing to the person who holds the asset, or part, when the chargeable event occurs. (8) (1) Sections 257P(1), 257PA(1) and 257PB to 257PD of ITA 2007— (a) apply in relation to a claim under this Schedule in respect of the social holding as they apply in relation to a claim under Part 5B to ITA 2007 in respect of an investment, and (b) as they so apply, have effect as if any reference to the requirements for relief under that Part were a reference to the conditions for the application of this Schedule. (2) In section 257PE(2) of ITA 2007 (power to make consequential amendments etc when amending provision about claims for SI relief) “enactment” includes (in particular) sub-paragraph (1).

SCHEDULE 13

1

CAA 2001 is amended as follows.

2

• (1) Section 45DB (exclusions from allowances under section 45DA) is amended as follows.

• (2) In subsection (3)(a), for “a firm in difficulty for the purposes of the Community Guidelines on State Aid for Rescuing and Restructuring Firms in Difficulty (2004/C 244/02)” substitute “ an undertaking in difficulty for the purposes of the General Block Exemption Regulation ”.

• (3) In subsection (4)(a), for “Council Regulation (EC) No 104/2000” substitute “ Regulation (EU) No 1379/2013 of the European Parliament and of the Council ”.

• (4) In subsection (11), in the definition of “General Block Exemption Regulation”, for “(EC) No 800/2008” substitute “ (EU) No 651/2014 ”.

• (5) In subsection (12), for paragraph (c) substitute—

(c) Regulation (EU) No 1379/2013 of the European Parliament and of the Council,

.

3

In section 45K (expenditure on plant and machinery for use in designated assisted areas), after subsection (8) insert—

(8A) Condition C is met by virtue of subsection (8)(c) only if the amount of the expenditure exceeds the amount by which the relevant plant or machinery is depreciated in the period of 3 years ending immediately before the beginning of the chargeable period in which the expenditure is incurred. (8B) “Relevant plant or machinery” means the plant or machinery being used at the end of the period of 3 years mentioned in subsection (8A) for the purposes of the product, process or service mentioned in subsection (8)(c).

4

• (1) Section 45M (exemptions from allowances under section 45K) is amended as follows.

• (2) In subsection (1), for “(6) or (7)” substitute “ (7) or (7A) ”.

• (3) In subsection (3)(a), for “a firm in difficulty for the purposes of the Community Guidelines on State Aid for Rescuing and Restructuring Firms in Difficulty (2004/C 244/02)” substitute “ an undertaking in difficulty for the purposes of the General Block Exemption Regulation ”.

• (4) In subsection (4)—

• (a) in paragraph (a), for “Council Regulation (EC) No 104/2000” substitute “ Regulation (EU) No 1379/2013 of the European Parliament and of the Council ”, and

• (b) after paragraph (b) insert—

(ba) in the transport sector or related infrastructure, (bb) relating to energy generation, distribution or infrastructure, (bc) relating to the development of broadband networks,

.

• (5) After that subsection insert—

(4A) Expressions used in subsection (4)(b), (ba), (bb) or (bc) and in the General Block Exemption Regulation have the same meaning as in that Regulation.

• (6) Omit subsection (6).

• (7) After subsection (7) insert—

(7A) Expenditure is within this subsection if— (a) the area by reference to which the condition in section 45K(1)(a) is met is not an area which falls within Article 107(3)(a) of the Treaty on the Functioning of the European Union, (b) the condition in section 45K(8)(a) is not met in relation to the expenditure, and (c) at the time the expenditure is incurred the company is not an SME for the purposes of the General Block Exemption Regulation.

• (8) In subsection (12)—

• (a) in the first definition, for the words from “ “coal” to “have” substitute “has”, and

• (b) in the definition of “General Block Exemption Regulation”, for “(EC) No 800/2008” substitute “ (EU) No 651/2014 ”.

• (9) In subsection (15), for paragraph (c) substitute—

(c) Regulation (EU) No 1379/2013 of the European Parliament and of the Council,

.

5

• (1) Section 45N (effect of plant or machinery subsequently being primarily for use outside designated assisted areas) is amended as follows.

• (2) In subsection (1)—

• (a) for “designated assisted area within the meaning of section 45K” substitute “ relevant area ”, and

• (b) for “such a designated assisted” substitute “ a relevant ”.

• (3) After subsection (3) insert—

(3A) Relevant area” means— (a) in relation to expenditure which would be within subsection (7A) of section 45M if paragraph (a) of that subsection were omitted, a designated assisted area within the meaning of section 45K which falls within Article 107(3)(a) of the Treaty on the Functioning of the European Union, and (b) in relation to any other expenditure, a designated assisted area within the meaning of section 45K.

6

In section 212T(6) (cap on first-year allowances: zero-emission goods vehicles), in the definition of “undertaking”, for “(EC) No 800/2008” substitute “ (EU) No 651/2014 ”.

7

In section 212U(5) (cap on first-year allowances: expenditure on plant and machinery for use in designated assisted areas), in the definition of “single investment project”, for “(EC) No 800/2008” substitute “ (EU) No 651/2014 ”.”

8

The amendments made by this Schedule have effect in relation to expenditure incurred on or after the day on which this Act is passed.

SCHEDULE 14

1

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2

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SCHEDULE 15

PART 1 — Amendments of Part 8 of CTA 2010

1

Part 8 of CTA 2010 (oil activities) is amended as follows.

Onshore allowance

2

Section 357 (other definitions) is renumbered as section 356AA.

3

After Chapter 7 insert—