Taxes Consolidation Act 1997 section 600K

Anti-avoidance: qualifying investment (shares)

Section 600K is an anti-avoidance provision that denies angel investor relief where arrangements exist to substantially reduce the risk associated with an investment in shares.

• Applies where any arrangement could reasonably be considered to substantially reduce the risk that the beneficial owner might be unable to realise a specified amount for the shares or might not receive specified distributions.
• The term "distribution" carries the same meaning as in the Corporation Tax Acts, covering dividends and other methods of extracting value from a company, and amounts may be specified in a foreign currency.
• References to the beneficial owner of the shares include both that person and any person connected with that person.
• An investment in shares caught by this section does not qualify as a qualifying investment for angel investor relief, and the arrangements in question may include any rights attached to the shares under the company's constitution.