Section 257QK — Income Tax Act 2007: Insignificant payments ignored for the purposes of section 257QJ

Insignificant payments ignored for the purposes of section 257QJ 257QK 1 A repayment is ignored for the purposes of section 257QJ if both—

a the market value of the shares to which it relates (“the target shares”) immediately before the event occurs, and b the amount received by the member in question, are insignificant in relation to the market value of the remaining issued share capital of the social enterprise, or (as the case may be) the subsidiary, immediately after the event occurs. This is subject to subsection (3).

2 For the purposes of subsection (1) it is to be assumed that the target shares are cancelled at the time the repayment is made.

3 Subsection (1) does not apply if repayment arrangements are in existence at any time in the period—

a beginning 12 months before the investment date, and b ending at the end of the investment date.

4 For this purpose “ repayment arrangements ” means arrangements which provide—

a for a repayment by the social enterprise or any subsidiary of the social enterprise (whether or not it is such a subsidiary at the time the arrangements are made), or b for anyone to be entitled to such a repayment, at any time in the longer applicable period.