Income Tax Act 2007 section 173AB

Maximum risk finance investments during period B requirement

Section 173AB caps the total amount of risk finance investments that may be received by an issuing company and its subsidiaries during period B (the three years following the date of issue of the relevant shares), specifically where a new subsidiary or trade is acquired using EIS money that has itself already benefited from earlier risk finance investments.

• The cap applies when a company becomes a 51% subsidiary of the issuing company during period B and EIS money is used for a trade that company was already carrying on, or when EIS money funds a trade that becomes a "relevant transferred trade" during period B.
• At all times during period B the cumulative total of relevant investments in the issuing company and its group must not exceed £20 million for knowledge-intensive companies or £12 million for all other companies.
• Relevant investments include those made in any current or former 51% subsidiary, investments whose proceeds funded a trade carried on by such a subsidiary, and investments whose proceeds funded a trade that later became a relevant transferred trade.
• Where only part of the money raised by an investment was used for a trade that became a relevant transferred trade, only the corresponding proportion of that investment counts towards the cap.