Income Tax Act 2007 section 257FC

Call options

Section 257FC deals with the withdrawal of SEIS income tax relief when an investor grants a call option over shares that qualified for relief under the Seed Enterprise Investment Scheme.

• If an investor grants a call option that would oblige them to sell any of their SEIS-qualifying shares, this section applies
• Granting the call option is treated as though the investor had actually disposed of the shares covered by that option
• This deemed disposal triggers the rules for withdrawal or reduction of SEIS relief under the disposal of shares provisions
• The call option rules operate independently of, and do not override, the separate requirement that there must be no pre-arranged exits