VCM13010 | EIS: income tax relief: the issuing company: issuing company requirements: overview

ITA07/S180

This part of the manual deals with the rules applying to the investee company - that is, the company issuing the shares. Guidance on investor requirements is at VCM11000+ and general requirements is at VCM12000+.

The issuing company must be a ‘qualifying company’. To be a qualifying company it must satisfy certain conditions, and most of those conditions apply throughout a period that starts with the issue of the shares and ends immediately before the termination date (VCM10540).

It follows that it cannot be known for certain whether a company qualifies in relation to a given share issue until the termination date related to that issue. This applies in respect of both income tax relief and deferral relief (VCM23000+).

The issuing company must meet requirements pertaining to:

• UK permanent establishment (see VCM13020),

• Financial health (see VCM13040),

• Trading (see VCM13050),

• Carrying on a qualifying business activity (see VCM13060 and for excluded activities see VCM3000+),

• Unquoted status (see VCM13090),

• Control and independence (see VCM13100),

• Gross assets (see VCM13110),

• Number of employees (see VCM13120),

• Qualifying subsidiaries (see VCM13130),

• Property managing subsidiaries (see VCM13140).