Taxes Consolidation Act 1997 section 508R

Value received by persons other than qualifying investors

Section 508R reduces or withdraws EIIS relief where, during the compliance period, the company or a company in the RICT group redeems, buys back or acquires shares from a person other than the qualifying investor.

• Relief is reduced where the company redeems, repurchases or buys back shares from any member other than the EIIS investor (or another investor whose relief was already reduced under section 508P(3)), or where a RICT group company acquires shares in the qualifying company from such a member, during the compliance period.
• The reduction equals the amount paid for the redemption or buy-back, or the nominal value of the share capital redeemed or bought back if greater, apportioned between investors in proportion to the relief to which each was originally entitled.
• Where a member receives or becomes entitled to receive value from the company during the compliance period, the company's issued share capital and the deemed capital interests under section 500(5) are treated as reduced by the value received, and any future entitlement to receive value is treated as a present entitlement.
• No reduction applies if the most recent qualifying investment by the RICT group was more than 18 months before the redemption and no further qualifying investment is made within 12 months after the redemption; this exemption applies to EIIS only and not to SCI (section 503) or SURE (section 507).