Income Tax Act 2007 section 214

Value received: receipts of insignificant value

Section 214 provides an exemption from the value received rules where the amount received is insignificant, but includes an aggregation rule to prevent investors from exploiting this by receiving multiple small amounts.

• Where an investor receives value from the issuing company that is of insignificant amount, the normal reduction or withdrawal of EIS relief under section 213 does not apply.
• However, if the investor receives multiple insignificant amounts during period C (the period relevant to the shares), these must be aggregated with any later receipt of value from the same company.
• If the combined total of the later receipt and the earlier insignificant receipts exceeds the insignificant value threshold, the investor is treated as having received value equal to that full combined total.
• Once an insignificant receipt has been included in a combined total that exceeds the threshold, it cannot be counted again in any subsequent aggregation calculation.