Section 809VI | The appropriate mitigation steps ^F1F2

(1)If the potentially chargeable event is a disposal of all or part of the holding, the appropriate mitigation steps are regarded as taken if the whole of the disposal proceeds have been taken offshore or re-invested.

(2)For any other case, the appropriate mitigation steps are regarded as taken if—

(a)P has disposed of the entire holding (or so much of it as P retains when the potentially chargeable event occurs), and

(b)the whole of the disposal proceeds have been taken offshore or re-invested.

(3)But —^F3

(a)see also section 809VIA (which makes provision treating the disposal proceeds as reduced where TRF capital is involved), and^F3

(b)if the disposal proceeds exceed X, subsections (1) and (2)(b) apply only to so much of the proceeds as is equal to X.^F3

(4)“X” is—

(a)the sum originally invested, less

(b)so much of that sum as has, on previous occasions involving the same investment—

(i)been taken into account in determining the affected income or gains under section 809VG(2),

(ii)been taken offshore or re-invested in order to avoid the application of that section, or

(iii)been used to make a tax deposit without which the amount actually taken offshore or re-invested would not have been enough to satisfy subsection (1) or (2)(b) (see section 809VK).

(5)“The sum originally invested” means the amount of the money, or the market value of the other property, used to make the investment.

(6)Market value is to be assessed for these purposes as at the date of the relevant event (see section 809VA).

(7)Proceeds are “re-invested” if a relevant person uses them to make another qualifying investment (or the proceeds are themselves a qualifying investment) whether in the same or a different company.

(8)In cases where a breach of the extraction of value rule occurs in connection with the winding-up or dissolution of the target company—

(a)subsection (2)(a) does not apply,

(b)the reference in subsection (2)(b) to the disposal proceeds is to the value received, and

(c)references in this section and in succeeding provisions of the business investment provisions to the disposal proceeds are to be read as references to the value received.