Section 159 | Use of relevant company's assets

(1)Subsection (2) applies if—

(a)a person (“P”) has, directly or indirectly, provided new consideration for any shares or securities in the relevant company,

(b)assets of the relevant company are used by P for the purposes of a trade carried on by P or are used by a person connected with P for the purposes of a trade carried on by that connected person, and

(c)in respect of those assets an allowance within subsection (3) has been made to the relevant company.

(2)P (and no other person) is to be treated as being an equity holder in relation to the shares or securities mentioned in subsection (1)(a).

(3)The allowances within this subsection are—

(a)an annual investment allowance, within the meaning of Chapter 5 of Part 2 of CAA 2001, in relation to expenditure incurred by the relevant company on the provision of plant or machinery,

(b)a first-year allowance, within the meaning of that Chapter, in relation to expenditure so incurred,

(c)a writing-down allowance, within the meaning of that Chapter, in relation to expenditure so incurred, and

(d)an allowance under Chapter 3 of Part 6 of CAA 2001 in relation to expenditure incurred by the relevant company on research and development (within the meaning of that Part).

(4)If—

(a)P is a bank,

(b)the only new consideration provided by P is provided in the normal course of banking business by way of a normal commercial loan (see section 162), and

(c)the cost to the relevant company of the assets mentioned in subsection (1)(b) is less than the amount of the new consideration,

the reference in subsection (2) to the shares or securities is to be read as a reference to only so much of that normal commercial loan as is equal to that cost of those assets.