Section 327A — Income Tax Act 2007: Follow-on funding

Follow-on funding 327A 1 Subsections (2) and (3) apply where—

a this section applies (see section 326(1)),

b the acquisition by the new company of all the old shares, which is provided for by the arrangements mentioned in section 326(1), takes place, and c the acquisition falls within section 326(2).

2 If, after the acquisition, another company makes an investment in the new company, section 280C (the permitted maximum age condition) has effect in relation to that investment as if—

a in subsection (4)(a) the reference to a relevant investment having been made in the relevant company before the end of the initial investing period included a reference to a relevant investment having been made in the old company before the acquisition and before the end of the initial investing period, and b in subsection (6)(a) the reference to relevant investments made in the relevant company included a reference to relevant investments made in the old company before the acquisition.

3 In relation to any relevant holding issued by the new company after the acquisition, section 294A (the permitted company age requirement) has effect as if—

a in subsection (3)(a) the reference to a relevant investment having been made in the relevant company before the end of the initial investing period included a reference to a relevant investment having been made in the old company before the acquisition and before the end of the initial investing period, and b in subsection (5)(a) the reference to relevant investments made in the relevant company included a reference to relevant investments made in the old company before the acquisition.

4 In subsection (3) “ relevant holding ” has the same meaning as in Chapter 4.