Income Tax Act 2007 section 257

Minor definitions etc.

Section 257 provides a glossary of key terms used throughout Part 5 (the Enterprise Investment Scheme) and clarifies how certain general definitions in the wider tax code are modified or disapplied for EIS purposes.

• Key EIS terms are defined, including "arrangements", "bonus shares", "ordinary shares", "director", "group", "parent company", "single company", and "research and development", each with a specific meaning for this Part of the Act.
• The general "connected persons" test in section 993 does not apply for the investor eligibility rules in Chapter 2 (except for one limited purpose in section 168(4)), and the general "control" definition in section 995 is replaced for certain specified sections by the close company control tests in sections 450 and 451 of CTA 2010.
• References to the "reduction" or "withdrawal" of EIS relief include reduction to nil, loss of relief not yet claimed, and relief obtained even after the investor has disposed of the shares; requirements that can only be verified at a future date are treated as met for the time being provided nothing has yet occurred to prevent them being met.
• Shares are only treated as being of the same class if they would be so treated were they dealt in on a recognised stock exchange, and market value means the open-market price free from any security interest.