Income Tax Act 2007

[F1 [F2 257MNB Section 257MNA: supplementary U.K.

(1) In section 257MNA(2) the reference to relevant investments “made in the social enterprise” includes—

(a) relevant investments made in a company which, at the material date, is or has been a 51% subsidiary of the social enterprise,

(b) any other relevant investment made in a company to the extent that the money raised by that relevant investment has been employed for the purposes of a trade carried on by another company (“company X”) which, at the material date, is or has been a 51% subsidiary of the social enterprise, and

(c) any other relevant investment made in a company if—

(i) the money raised by that relevant investment has been employed for the purposes of a trade carried on by that company or another person, and

(ii) after that relevant investment was made, but on or before the material date, that trade became a transferred trade (see subsection (5)).

(2) The investments within paragraph (a) of subsection (1)—

(a) include investments made in a company mentioned in that paragraph before it became a 51% subsidiary of the social enterprise, but

(b) where a company mentioned in that paragraph is not a 51% subsidiary of the social enterprise at the material date, do not include any investments made in that company after it last ceased to be such a subsidiary.

(3) For the purposes of subsection (1)(b), where company X is not a 51% subsidiary of the social enterprise at the material date, any money employed after company X last ceased to be such a subsidiary is to be ignored.

(4) Where only a proportion of the money raised by a relevant investment is employed for the purposes of a trade which becomes a transferred trade, only the corresponding proportion of that relevant investment is to be treated as falling within subsection (1)(c).

(5) For the purposes of this section, if—

(a) on or before the material date a trade is transferred—

(i) to the social enterprise,

(ii) to a company which, at the material date, is or has been a 51% subsidiary of the social enterprise, or

(iii) to a partnership of which the social enterprise, or a company within sub-paragraph (ii), is a member, and

(b) the trade or part of it was at any time before the transfer carried on by another person,

the trade or part mentioned in paragraph (b) becomes a “ transferred trade ” when it is transferred as mentioned in paragraph (a).

(6) The cases within subsection (5)(a)—

(a) include the case where the trade is transferred to a company within subsection (5)(a)(ii), or a partnership of which such a company is a member, before the company became a 51% subsidiary of the social enterprise, but

(b) where a company within subsection (5)(a)(ii) is not a 51% subsidiary of the social enterprise at the material date, do not include the case where the trade is transferred to that company, or a partnership of which that company is a member, after that company last ceased to be such a subsidiary.

(7) In this section—

• “the material date” means the date on which the investment is made;

• “relevant investment” has the meaning given by section 173A(3) (reading references in section 173A(3) to a company as including any social enterprise).

(8) Section 173A(4) and (5) apply to determine for the purposes of this section when a relevant investment is made.

(9) Section 173A(6) and (7) (meaning of “trade” etc) apply also for the purposes of this section.]]

Textual Amendments

F1 Pt. 5B inserted (17.7.2014) by Finance Act 2014 (c. 26), Sch. 11 para. 1

F2 Ss. 257MNA-257MNE and cross-heading inserted (with effect in accordance with Sch. 1 para. 14(1)(2) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 1 para. 6(3)