Section 279 | Conditions relating to value of investments: qualifying holdings

(1)If—

(a)any shares (“new shares”) are exchanged for other shares (“old shares”) under arrangements in relation to which section 326 (restructuring arrangements) applies, and

(b)those arrangements have not ceased by virtue of section 326(5) to be arrangements by reference to which requirements of Chapter 4 are treated as met,

the value of the new shares is taken to be the same as the value, when last valued in accordance with subsection (2) or (3) of section 278, of the old shares for which they are exchanged.

(2)In subsection (1)—

(a)references to shares in a company include references to any securities of that company, and

(b)the reference to the value of the new shares includes references to the value of those shares both—

(i)at the time of their acquisition, and

(ii)immediately after any subsequent addition to a holding of the new shares that is made under the arrangements.

(3)If—

(a)shares (“new shares”) are issued to a company as a result of the exercise by that company of any right of conversion attached to other shares, or securities, held by that company (“convertibles”), and

(b)section 329 (conversion of convertible shares and securities) applies in relation to the issue of the new shares,

the value of the new shares at the time of their acquisition is taken to be the same as the value, when last valued in accordance with subsection (2) or (3) of section 278, of the convertibles for which they are exchanged.

(4)Regulations under section 330 may make provision for securing that if—

(a)there is an exchange of shares to which regulations under section 330 apply, and

(b)the new shares are treated by virtue of the regulations as meeting the requirements of Chapter 4,

the value of the holding of the new shares, and of any original shares that are retained under the exchange, is taken to be an amount such that the requirements of the relevant conditions do not cease to be met because of the exchange.

(5)In subsection (4)—

(a)“shares” includes securities, and

(b)“exchange of shares”, “new shares” and “original shares” have the same meaning as in section 330.