Revenue Note for Guidance
(1) In this section “distribution” has the same meaning as in the Corporation Tax Acts.
(2) For the purposes of this section, an amount specified or implied shall include an amount specified or implied in a foreign currency.
(4) The person beneficially owning shares shall be deemed to be a reference to both that person and any person connected with that person.
(5) Relief from income tax shall not be allowed under this Part in respect of the amount subscribed for any shares to which this section applies.
(3) This section applies to shares in a company where any agreement, arrangement or understanding exists which could reasonably be considered to substantially reduce the risk that the person beneficially owning those shares might, at a time specified or implied by that, be unable to realise directly or indirectly in money or money’s worth an amount so specified or implied, other than a distribution, in respect of those shares. Or might not receive an amount so specified or implied of distributions in respect of those shares.
(6) Such agreements, arrangements or understandings may include the rights associated with the shares as set out in the company’s constitution other than those permitted under section 494(3). The terms of any shareholders agreement, or any other agreement, arrangement or understanding with any member of the RICT group or any person connected with any member of the RICT group, including personal guarantees from existing shareholders that the investor will be able to dispose of the shares after the relevant period, or rights over the assets of the qualifying company or its qualifying subsidiaries, in the event that the investor is not able to dispose of the shares after the relevant period.
Relevant Date: Finance Act 2021