Income Tax Act 2007 section 257DF

The unquoted status requirement

Section 257DF requires that a company issuing shares under the Seed Enterprise Investment Scheme must be an unquoted company at the start of period B, with no arrangements in place to change that status.

• At the beginning of period B, the issuing company must be unquoted — meaning none of its shares, stocks, debentures or other securities are marketed to the general public
• There must be no arrangements in existence for the company to become quoted, whether directly or indirectly through a share exchange that would make it a subsidiary of a new company that itself plans to become quoted
• Securities are treated as marketed to the general public if they are listed on a recognised stock exchange, listed on a designated overseas exchange, or dealt in outside the UK by designated means — with HMRC having the power to make those designations by order
• An exception applies where securities later become listed or dealt in on an exchange or by means that were only designated by an HMRC order made after the beginning of period B — such subsequent designations do not count as pre-existing arrangements that would breach the requirement