Section 257QJ | Repayments etc of share capital to other persons ^F1

(1)This section applies if any SI relief is attributable to the whole or any part of the investment and, at any time in the longer applicable period, the social enterprise or any subsidiary—^F1

(a)repays, redeems or repurchases any of its share capital which belongs to any member other than—^F1

(i)the investor, or^F1

(ii)a person who falls within subsection (5), or^F1

(b)makes any payment to any such member for giving up the member's right to any of the share capital of the social enterprise or subsidiary on its cancellation or extinguishment.^F1

(2)The SI relief must—^F1

(a)if it is greater than the amount given by the formula set out in subsection (3), be reduced by that amount, and^F1

(b)in any other case, be withdrawn.^F1

(3)The formula is—^F1

(4)This section is subject to sections 257QK to 257QP; and sections 257QL to 257QO are to be applied in the order in which they appear in this Part.^F1

(5)A person falls within this subsection if the repayment causes any SI relief attributable to that person's shares in the social enterprise to be withdrawn or reduced by virtue of—^F1

(a)section 257QE(2)(a) (receipt of value by virtue of repayment of investments etc), or^F1

(b)section 257R (disposal of whole or part of the investment).^F1

(6)A repayment is treated as having the effect mentioned in subsection (5)(a) if it would have that effect were it not an insignificant receipt; and here “insignificant receipt” is to be read in accordance with section 257QA(1).^F1

(7)A repayment is to be ignored, for the purposes of this section, to the extent to which SI relief attributable to any shares has already been withdrawn or reduced on its account.^F1

(8)In this section and sections 257QK to 257QP—^F1

(a)“repayment” means a repayment, redemption, repurchase or payment mentioned in subsection (1)(a) or (b), and^F1

(b)references to a subsidiary of the social enterprise are references to a company which at any time in the longer applicable period is a 51% subsidiary of the social enterprise (whether or not it is such a subsidiary at the time of the repayment).^F1