Section 292AB | Maximum risk finance investments during the 5-year post-investment period requirement ^F1

(1)The requirement of this section applies if condition A or B is met.^F1

(2)Condition A is that—^F1

(a)a company becomes a 51% subsidiary of the relevant company at any time during the 5-year post-investment period,^F1

(b)all or part of the money raised by the issue of the relevant holding is employed for the purposes of a relevant qualifying activity which consists wholly or in part of a trade carried on by that company, and^F1

(c)that trade (or a part of it) was carried on by that company before it became a 51% subsidiary as mentioned in paragraph (a).^F1

(3)Condition B is that all or part of the money raised by the issue of the relevant holding is employed for the purposes of a relevant qualifying activity which consists wholly or in part of a trade which, during the 5-year post-investment period, becomes a relevant transferred trade (see subsection (7)).^F1

(4)The requirement of this section is that, at all times during the 5-year post-investment period, the total of the relevant investments made in the relevant company before the time in question (“the relevant time”) must not exceed—^F1

(a)if at the investment date the relevant company is a knowledge-intensive company (see section 331A) and—^F1F2

(i)not a specified Northern Ireland company, £40 million;^F1F2

(ii)a specified Northern Ireland company, £20 million, and^F1F2

(b)if at the investment date the relevant company is not a knowledge-intensive company and—^F1F2

(i)not a specified Northern Ireland company, £24 million;^F1F2

(ii)a specified Northern Ireland company, £12 million.^F1F2

(5)In subsection (4) the reference to relevant investments made in the relevant company includes—^F1

(a)any relevant investment made in any company that has at any time before the relevant time been a 51% subsidiary of the relevant company (including investments made in that company before it became such a subsidiary but, if it is not such a subsidiary at the relevant time, not investments made in it after it last ceased to be such a subsidiary),^F1

(b)any other relevant investment made in a company to the extent that the money raised by the investment has been employed for the purposes of a trade carried on by another company that has at any time before the relevant time been a 51% subsidiary of the relevant company (but, if it is not such a subsidiary at the relevant time, ignoring any money so employed after it last ceased to be such a subsidiary), and^F1

(c)any other relevant investments made in a company where—^F1

(i)the money raised by the investment has been employed for the purposes of a trade carried on by that company or another person, and^F1

(ii)after that investment was made, but before the relevant time, that trade (or a part of it) became a relevant transferred trade (see subsection (7)).^F1

(6)If only a proportion of the money raised by a relevant investment is employed for the purposes of a trade which became a relevant transferred trade, the reference in subsection (5)(c) to the relevant investment is to be read as a reference to the corresponding proportion of that investment.^F1

(7)Where—^F1

(a)a trade is transferred—^F1

(i)to the relevant company,^F1

(ii)to a company that at the relevant time is, or has before that time been, a 51% subsidiary of the relevant company, or^F1

(iii)to a partnership of which a company within sub-paragraph (i) or (ii) is a member,^F1

(including where it is transferred to a company within sub-paragraph (ii), or a partnership of which such a company is a member, before the company became such a subsidiary but, if the company is not such a subsidiary at the relevant time, not where it is transferred to such a company or partnership after the company last ceased to be such a subsidiary), and

(b)the trade or a part of it was previously (at any time) carried on by another person,^F1

the trade or part mentioned in paragraph (b) becomes a “ relevant transferred trade ” at the time it is transferred as mentioned in paragraph (a).

(8)In this section—^F1

“5-year post-investment period” means the period of 5 years beginning with the day after the investment date;

“the investment date” means the date on which the relevant holding is issued;

“relevant investment” has the meaning given by section 292A(3), and section 292A(4) and (4A) (which determines when certain investments are made) applies for the purposes of this section;

and section 280B(8) and (9) (meaning of “trade” etc) applies for the purposes of this section as it applies for the purposes of section 280B.

(9)Subsection (10) applies if, by virtue of the provision of a compliance statement under section 205, 257ED or 257PB, the requirement of this section is not met.^F1

(10)The requirement is to be treated as having been met throughout the period—^F1

(a)beginning with the investment date, and^F1

(b)ending with the time the compliance statement was provided.^F1