Income Tax Act 2007 section 257HF

Meaning of "new qualifying trade"

Section 257HF defines what counts as a "new qualifying trade" for the purposes of the SEIS provisions, setting out the conditions a trade must satisfy to be regarded as genuinely new.

• A new qualifying trade is one carried on by the issuing company or its qualifying 90% subsidiary (the "relevant company") that was not started by anyone more than three years before the shares are issued.
• Before the relevant company began the trade, neither the issuing company nor any 51% subsidiary of the issuing company must have been carrying on any other trade.
• A "qualifying trade" takes its meaning from the EIS rules in Part 5 of the Act (sections 189 and 192 to 200), which list the types of trade that qualify and the activities that are excluded.
• The "three year pre-investment period" is the three-year window ending immediately before the day on which the relevant shares are issued.