Taxes Consolidation Act 1997 section 600L

Anti-avoidance: qualifying investment (investor perspective)

Section 600L sets out anti-avoidance rules that deny angel investor relief where the investor was previously involved in the business now being carried on by the company.

• An investment is not a qualifying investment if, within three years of the investment date, the company or a qualifying subsidiary begins carrying on a business previously carried on by the investor or acquires the whole or greater part of the assets of such a business.
• The restriction applies where the investor (alone or as part of a group) held more than a 50 per cent interest in the previous business, or controlled a company that previously carried on the business.
• Relief is also denied where the company acquires all the issued share capital of another company within the three-year period and the investor controlled that other company.
• Business ownership and interests are determined in accordance with section 400, and any interest, rights or powers held by an associate of the investor are treated as belonging to the investor.