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Finance Act 2012

Chapter 8

80.New section 257H allows for transfers of shares between spouses or civil partners not to be treated as a disposal. The SEIS relief remains attributable to the shares until a disposal or other relevant event by the spouse or civil partner to whom they were transferred.

81.New section 257HA sets out rules determining which shares are treated as having been disposed of under either new section 257FA or 257H.

82.New section 257HB provides for the continuity of SEIS relief where a new holding company is inserted above a company which has issued shares to which SEIS relief is attributable, resulting in shareholders exchanging their original shares for shares in the new holding company.

83.Providing that certain conditions as specified by section 257HB(2) are met, new section 257HB(3) provides that the original shares are not treated as disposed of, and that the relief which was attributed to them is instead attributed to the shares in the new holding company.

84.New sections 257HC and 257HD ensure that in other respects, the SEIS legislation applies in respect of the new shares as it would have done in respect of the old shares.

85.New section 257HE contains provisions applying to nominees and bare trustees.

86.New section 257HF defines a “new qualifying trade” as being one which has not been carried on by either the company or by any other person for longer than two years at the date of issue of the shares; and neither the company nor any qualifying subsidiary had carried on any other trade before the company in question began to carry on the new trade.

87.New section 257HG defines “qualifying business activity” as either carrying on, or preparing to carry on, a new qualifying trade, or carrying on research and development from which a new qualifying trade will be developed (or which will benefit a new qualifying trade). For a business activity to be “qualifying” it must be carried on by either the issuing company or by a qualifying 90 per cent subsidiary.

88.New sections 257HH and 257HI define the terms “disposal of shares” and “issue of shares”.

89.New section 257HJ contains a number of definitions of terms used elsewhere in part 5A.

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