Income Tax Act 2007 section 257BC

The no related investment arrangements requirement

Section 257BC prevents SEIS investors from subscribing for shares as part of a wider arrangement that involves another person subscribing for shares in a company in which the investor or any other party to the arrangement has a substantial interest.

• An investor ("P") must not subscribe for SEIS shares as part of a linked arrangement involving share subscriptions in another company.
• The restriction applies where the arrangement provides for another person to subscribe for shares in that other company.
• The rule is triggered if P, or any other individual who is party to the arrangement, holds a substantial interest in the other company.
• The purpose is to prevent reciprocal or circular investment schemes designed to exploit SEIS relief.