Section 257QQ — Finance Act 2014: Acquisition of a trade or trading assets

Acquisition of a trade or trading assets 257QQ 1 Any SI relief attributable to the investment is withdrawn if—

a at any time in the longer applicable period, the social enterprise or any qualifying subsidiary—

i begins to carry on as its trade, or as part of its trade, a trade which was previously carried on at any time in that period otherwise than by the social enterprise or any qualifying subsidiary, or ii acquires the whole, or the greater part, of the assets used for the purposes of a trade previously so carried on, and b the investor is a person, or one of a group of persons, to whom subsection (2) or (3) applies.

2 This subsection applies to any person or group of persons—

a to whom an interest amounting in total to more than a half share in the trade (as previously carried on) belonged at any time in the longer applicable period, and b who is or are a person or group of persons to whom such an interest in the trade carried on by the social enterprise belongs or has, at any such time, belonged.

3 This subsection applies to any person or group of persons who—

a control or, at any time in the longer applicable period, have controlled the social enterprise, and b is or are a person or group of persons who, at any such time, controlled another company which previously carried on the trade.

4 For the purposes of subsection (2)—

a for the purpose of determining the person to whom a trade belongs and, if a trade belongs to two or more persons, their respective shares in that trade—

i apply section 941(6) of CTA 2010, and ii an interest in a trade belonging to a company may be treated in accordance with any of the options set out in section 942 of that Act, and b any interest, rights or powers of a person who is an associate of another person are treated as those of that other person.

5 If the investor—

a is a director of, or of a company which is a partner of, the social enterprise or any qualifying subsidiary, and b is in receipt of, or entitled to receive, remuneration as such a director falling within section 257LF(5)(g) (reasonable remuneration for services), then, in determining whether any SI relief attributable to the investment is to be withdrawn, the reference in subsection (3)(b), and (so far as relating to that provision) the reference in subsection (1)(a)(i), to any time in the longer applicable period are to be read as references to any time before the end of the longer applicable period.

6 Section 257LF(8) (director also an employee) applies for the purposes of subsection (5) as it applies for the purposes of section 257LF, and in subsection (5) “ remuneration ” includes any benefit or facility.

7 In this section “ trade ” includes any business or profession, and references to a trade previously carried on include references to part of such a trade.