Section 164A | The existing shareholdings requirement ^F1

(1)If, at the time the relevant shares are issued, the investor holds any other shares in a company within subsection (2) (“C”), those other shares must be—

(a)a risk finance investment, or

(b)subscriber shares which—

(i)were issued to, and have since they were issued been continuously held by, the investor, or

(ii)were acquired by the investor at a time when C had not issued any shares other than subscriber shares and had not begun to carry on or make preparations for carrying on any trade or business.

(2)The companies referred to in subsection (1) are—

(a)the issuing company, and

(b)any company which is a qualifying subsidiary of the issuing company at the time the relevant shares are issued.

(3)Shares in a company are a “risk finance investment” if—

(a)they are issued by the company to the investor, and

(b)(at any time) the company provides a compliance statement under section 205, 257ED or 257PB in respect of the issue of shares which includes those shares.