Taxes Consolidation Act 1997 section 508N

Anti-avoidance: disposals of shares

Section 508N withdraws EIIS relief where an investor uses options or agreements to buy or sell eligible shares at a price other than market value during the compliance period.

• References to an option or agreement include a right or obligation to acquire or grant an option or enter into an agreement, and the exercise of an option includes one acquired or granted under such a right or obligation.
• EIIS relief is withdrawn where the investor, directly or indirectly, acquires an option or enters into an agreement that would bind or cause another person to purchase eligible shares at a price other than market value.
• Relief is also withdrawn where the investor grants an option or enters into an agreement that would bind or cause the investor to dispose of eligible shares to another person at a price other than market value.
• In all cases, the relevant price is assessed by reference to the terms of the option or agreement, any related arrangement or understanding, and the net effect of those terms considered as a whole.