35(1)Chapter 2 of Part 7A of ITEPA 2003 does not apply by reason of a relevant step within paragraph 1 which is treated as being taken by a person (“P”) if the conditions in sub-paragraph (2) are met.
(2)The conditions are that—
(a)the loan or quasi-loan concerned was made before 9 December 2010,
(b)if P is treated as taking a relevant step by paragraph 1 by reason of the payment of a sum of money by way of loan, the sum is used by A solely to acquire employer shares,
(c)if P is treated as taking a relevant step by paragraph 1 by reason of making a quasi-loan, the transfer of assets mentioned in paragraph 2(3)(b) is the transfer of employer shares to A,
(d)the employer shares are acquired, or transferred, before the end of the period of one year beginning with the day on which the loan, or quasi-loan, is made, and
(e)the employer shares are not listed on a recognised stock exchange at any time during the period beginning with the day on which the loan, or quasi-loan, is made and ending with the earlier of—
(i)the day on which A ceases to hold the shares, or
(ii)the day on which the loan, or quasi-loan, is repaid.
(3)In this paragraph “employer shares” means shares that form part of the ordinary share capital of—
(a)B, or
(b)if B is a company and is a member of a group of companies at the time the shares are acquired, any other company which is a member of that group at that time.
(4)Sub-paragraph (6) applies if—
(a)apart from sub-paragraph (1), Chapter 2 of Part 7A would apply by reason of the relevant step mentioned in sub-paragraph (1), and
(b)at the end of the relevant period, an amount of the loan, or quasi-loan, is outstanding.
(5)In this paragraph “the relevant period” means the period of 12 months beginning with the day on which A ceases to hold the shares.
(6)Part 7A of ITEPA 2003 has effect as if—
(a)a relevant step within paragraph 1 were taken by reason of making a loan, or quasi-loan, of an amount equal to the amount of the loan, or quasi-loan, outstanding at the end of the relevant period, and
(b)the relevant step were taken on the day after the end of the relevant period.