Income Tax Act 2007 section Schedule 2 paragraph 38

Qualifying trading companies

Section Schedule 2 paragraph 38 sets out transitional rules that modify the qualifying trading company conditions in section 134 depending on when the shares were originally issued.

• Shares issued before 17 March 2004 are assessed under section 134 but with the omission of one sub-paragraph relating to an additional qualifying condition introduced on that date.
• Shares issued before 6 April 1998 are subject to entirely different qualifying conditions, requiring the company to be (or recently have been) a trading company, to have traded continuously for six years (or a shorter period if it was never an excluded or investment company), and for its shares never to have been listed on a recognised stock exchange during a specified window.
• Shares issued before 7 March 2001 use the wording "throughout the relevant period" rather than "at the relevant time" when testing whether the company met the qualifying conditions, imposing a stricter continuous requirement.
• Shares issued between 6 April 1998 and 6 March 2001 are treated as if issued after 7 March 2001 for any part of the relevant period that falls after that date, creating a blended transitional rule.

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