Income Tax Act 2007 section 257CC

The spending of the money raised requirement

Section 257CC sets out the requirement that money raised through the issue of shares must be spent on the qualifying business activity within a specified timeframe.

• All money raised from the share issue (excluding bonus shares) must be spent on the qualifying business activity by the end of period B
• Buying shares or stock in another company does not count as spending money on a qualifying business activity
• The requirement is not breached if only an insignificant amount is spent on other purposes or remains unspent at the end of period B
• The purpose for which the money is spent must match the qualifying business activity for which it was originally raised