SCHEDULES

SCHEDULE 5Enterprise investment scheme

The investor

3

In section 162 (overview of Chapter 2: the investor), omit the “and” at the end of paragraph (b) and after that paragraph insert—

ba

existing shareholdings (see section 164A), and

4

After section 164 insert—

164AThe existing shareholdings requirement

1

If, at the time the relevant shares are issued, the investor holds any other shares in a company within subsection (2) (“C”), those other shares must be—

a

a risk finance investment, or

b

subscriber shares which—

i

were issued to, and have since they were issued been continuously held by, the investor, or

ii

were acquired by the investor at a time when C had not issued any shares other than subscriber shares and had not begun to carry on or make preparations for carrying on any trade or business.

2

The companies referred to in subsection (1) are—

a

the issuing company, and

b

any company which is a qualifying subsidiary of the issuing company at the time the relevant shares are issued.

3

Shares in a company are a “risk finance investment” if—

a

they are issued by the company to the investor, and

b

(at any time) the company provides a compliance statement under section 205, 257ED or 257PB in respect of the issue of shares which includes those shares.

5

In section 166 (connection with issuing company), after subsection (1) insert—

1A

But see section 252A(12) for provision which disapplies section 168.