Income Tax Act 2007 section 257FP

Acquisition of trade or trading assets

Section 257FP deals with the withdrawal of SEIS income tax relief where the company or a qualifying subsidiary takes over a trade or trading assets previously carried on by another person, and the investor had a significant connection with that earlier trade.

• SEIS relief is withdrawn if, during period A, the company or a qualifying subsidiary begins carrying on a trade previously carried on by someone else, or acquires the whole or greater part of the assets used in such a trade.
• Withdrawal applies where the investor (alone or as part of a group) held more than a half share in the previous trade at any time in period A and also holds or held such an interest in the trade as carried on by the company.
• Withdrawal also applies where the investor (alone or as part of a group) controls or controlled the company at any time in period A and also controlled another company that previously carried on the trade.
• For the purpose of determining trade ownership and shares in a trade, the rules in sections 941(6) and 942 of the Corporation Tax Act 2010 apply, and the interests, rights or powers of associates are attributed to the person with whom they are associated.