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Finance Act 2012

Chapter 6

58.New section 257F is an overview of chapter 6 which contains provisions dealing with the withdrawal of relief given for SEIS shares (“relevant shares”). Many of the provisions in chapter 6 are counterparts to conditions contained in the preceding chapters, setting out what happens when those conditions are breached.

59.New section 257FA withdraws relief where, before the end of period B, the investor disposes of shares for which SEIS relief has been given. In particular, it contains computational rules setting out how much relief is to be withdrawn.

60.New section 257FA(6) ensures that the death of an investor does not trigger the withdrawal of any relief given.

61.New section 257FB supplements those rules for cases where full relief was not obtained.

62.New sections 257FC and 257FD withdraw relief where the investor holds a call or put option in relation to the relevant shares.

63.New section 257FE withdraws relief where during period A the investor receives any value from the company relating to the relevant shares.

64.New section 257FF provides that relief is not withdrawn where the value received is insignificant (defined in new section 257FG).

65.New section 257FG defines insignificant as an amount that does not exceed £1,000, or if it does exceed that amount is insignificant compared to the amount subscribed for the shares.

66.New section 257FH defines a number of different circumstances in which value is received. These cover various ways in which the company might make payments to the investor. A number of circumstances are excluded – for example where the investor is a director of the company and is reimbursed expenses incurred in performance of his or her duties.

67.New section 257FI defines the amount of value received in the various cases described by new section 257FH.

68.New sections 257FJ – 257FO contain supplementary provisions concerning the receipt of value in particular circumstances.

69.New section 257FP withdraws relief where, during period A, the company or any qualifying subsidiary takes over the trade or assets previously used by another person in their trade, and the investor either had or has more than a half share in the trade, or controls or has controlled the issuing company and controls or has controlled the company which previously carried on the trade.

70.New section 257FQ withdraws relief if the company acquires all the issued share capital of another company in period A, and the investor is a person or one of a group of persons, who control(s) both companies.

71.New section 257FR withdraws relief given where, at some later date, it is found not to have been due.

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