Part 5

Enterprise investment scheme
Chapter 2

The investor

Meaning of connection with issuing company

Persons interested in capital etc of company
170
1
An individual is connected with the issuing company if the individual directly or indirectly possesses or is entitled to acquire more than 30% of—
a
the ordinary share capital of the company or any subsidiary of the company,
b
the ... issued share capital of the company or any such subsidiary, or
c
the voting power in the company or any such subsidiary.
2
An individual is connected with the issuing company if the individual directly or indirectly possesses or is entitled to acquire such rights as would—
a
in the event of the winding up of the company or any subsidiary of the company, or
b
in any other circumstances,
entitle the individual to receive more than 30% of the assets of the company or subsidiary (“the company in question”) which would then be available for distribution to equity holders of the company in question.
3
For the purposes of subsection (2)—
a
the persons who are equity holders of the company in question, and
b
the percentage of the assets of the company in question to which the individual would be entitled,
are determined in accordance with Chapter 6 of Part 5 of CTA 2010.
4
In making that determination—
a
references in section 166 of that Act to company A are to be read as references to an equity holder, and
b
references in that section to a winding up are to be read as including references to any other circumstances in which assets of the company in question are available for distribution to its equity holders.
5
An individual is not connected with a company merely because one or more shares in the company are held by the individual or by an associate of the individual, at a time when the company—
a
has not issued any shares other than subscriber shares, and
b
has not begun to carry on, or make preparations for carrying on, any trade or business.
6
An individual is connected with the issuing company if the individual has control of the issuing company or of any subsidiary of that company.
7
In this section “subsidiary”, in relation to the issuing company, means a company which at any time in period A is a 51% subsidiary of the issuing company, whether or not it is such a subsidiary while the individual concerned has, or is entitled to acquire, such capital, voting power, rights or control as are mentioned in this section.
8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
For the purposes of this section—
a
an individual is treated as entitled to acquire anything which the individual is entitled to acquire at a future date or will at a future date be entitled to acquire, and
b
there is attributed to any individual any rights or powers of any other person who is an associate of the individual.
10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Words in s. 170(3) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 499(a) (with Sch. 2)
Words in s. 170(4)(a) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 499(b) (with Sch. 2)
Word in s. 170(4)(b) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 499(c) (with Sch. 2)
Words in s. 170(1)(b) omitted (17.7.2012) (with effect in accordance with Sch. 7 para. 22 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 7 para. 4(a)
S. 170(8) omitted (17.7.2012) (with effect in accordance with Sch. 7 para. 22 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 7 para. 4(b)
S. 170(10) omitted (17.7.2012) (with effect in accordance with Sch. 7 para. 22 of the amending Act) by virtue of Finance Act 2012 (c. 14), Sch. 7 para. 4(b)