Finance Act 2000

6 (1) Section 312 of the Taxes Act 1988 (interpretation of Chapter III) is amended as follows.

(2) In subsection (1) after the definition of “debenture” insert—

““the designated period” has the meaning given by section 291(6);”.

(3) In that subsection, for “and” at the end of the definition of “51 per cent subsidiary” substitute—

““termination date” in relation to any eligible shares issued by a company, means the third anniversary of the issue date or if—

(a) the shares were issued wholly or mainly in order to raise money for the purpose of a qualifying business activity falling within section 289(2)(a) (company meeting trading activities requirement by reason of the company or a subsidiary carrying on or preparing to carry on a qualifying trade), and

(b) the company or subsidiary concerned had not begun to carry on the trade in question on the issue date,

the third anniversary of the date on which it begins to carry on that trade; and”.

(4) For subsection (1A) (definition of “relevant period”) substitute—

“(1A) In any provision of this Chapter “relevant period”, in relation to any eligible shares issued by a company, means whichever of the following periods is applied for the purposes of that provision—

(a) the period beginning either—

(i) with the incorporation of the company, or

(ii) if the company was incorporated more than two years before the date on which the shares were issued, two years before that date,

and ending immediately before the termination date relating to the shares, and

(b) the period beginning with the issue of the shares and ending immediately before the termination date relating to them.”.