Income Tax Act 2007 section 249

Substitution of new shares for old shares

Section 249 ensures that when old EIS shares are exchanged for new shares following a company acquisition under section 247, the new shares inherit the tax history of the old shares, preserving the individual's EIS relief position.

• New shares are treated as if subscribed for at the same time and for the same amount as the original old shares
• New shares are treated as if issued by the new company at the same time the old company issued the original shares
• The EIS relief claim originally made for the old shares is deemed to have been made for the new shares
• The income tax reduction attributed to the new shares applies for the same tax year as the original reduction on the old shares