Income Tax Act 2007 section 257BF

Persons with a substantial interest in a company

Section 257BF defines when an individual is treated as having a "substantial interest" in a company, which is relevant to determining eligibility for the Seed Enterprise Investment Scheme (SEIS) tax reliefs.

• An individual has a substantial interest if they directly or indirectly hold or are entitled to acquire more than 30% of a company's ordinary share capital, issued share capital, or voting power, or if they would be entitled to receive more than 30% of the company's assets on a winding up or other distribution
• Control of the company or any of its subsidiaries also gives rise to a substantial interest, and the rights and powers of associates are attributed to the individual for the purposes of this test
• An individual is not treated as having a substantial interest merely because they or an associate hold subscriber shares in a company that has not yet issued any other shares and has not begun trading or preparing to trade
• A "subsidiary" for these purposes means a company that is a 51% subsidiary at any time during period A, regardless of whether it holds that status at the time the individual possesses the relevant capital, voting power, rights or control