PART 1Direct taxes

Income tax: investments

13VCTs: exchange of non-qualifying shares and securities

1

Section 330 of ITA 2007 (power to facilitate company reorganisations etc involving exchange of shares) is amended as follows.

2

After subsection (1) insert—

1A

The Treasury may by regulations make provision for the purposes of this Part for cases where—

a

a holding of shares or securities that does not meet the requirements of Chapter 4 is exchanged for other shares or securities not meeting those requirements, and

b

the exchange is made for genuine commercial reasons and does not form part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax.

3

In subsection (2), for “subsection (1)” substitute “subsections (1) and (1A)”.

4

In subsection (3), for “The regulations” substitute “Regulations under subsection (1)”.

5

After subsection (3) insert—

3A

Regulations under subsection (1A) may, among other things, make provision—

a

for the new shares or securities to be treated in any respect in the same way as the original shares and securities for any period;

b

as to when the new shares or securities are to be regarded as having been acquired;

c

as to the valuation of the original or the new shares or securities.

6

In subsection (4), for “The regulations” substitute “Regulations under this section”.

7

In subsection (6). in paragraph (c), at the beginning insert “in the case of regulations under subsection (1)”.