Taxes Consolidation Act 1997 section 508Q

Qualification to section 508P for specified persons

Section 508Q provides that the receipt of value rules under the SURE scheme do not apply where a specified individual's loan to a company is converted into eligible shares within one year.

• Where a specified individual invests in a company by way of a loan and that loan is converted into eligible shares within one year, the individual is not treated as having received value from the company under the receipt of value rules.
• The company's statutory auditor must certify that the money raised by the loan was used solely for a qualifying purpose.
• The conversion of the loan into eligible shares is treated as the making of a relevant investment on the date the loan is converted, provided the business plan was prepared before the loan was made.
• This allows SURE investors who initially invest by way of a loan rather than a direct share subscription to qualify for relief without falling foul of the receipt of value provisions.