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E3.870 Continuity of SEIS relief where issuing company is acquired by new company

A new holding company may be inserted above a company which has issued shares to which SEIS relief is attributable by shareholders. This will be achieved by exchanging the original shares for shares in the new holding company (ie a share for share exchange).

Providing that certain conditions are met, the original shares are not treated as disposed of, and the relief which was attributed to them is instead attributed to the shares in the new holding company¹.

The insertion of a new holding company may be done as part of a rationalisation of the structure of the business or in preparation for obtaining a listing on a stock exchange. The provisions do not apply where two companies become subsidiaries of the same new holding company, or in the case of a take-over by an established company².