Income Tax Act 2007 section 179

Meaning of "qualifying business activity"

Section 179 defines what counts as a "qualifying business activity" for the purposes of EIS relief, covering both trading activities and research and development carried on by the issuing company or its qualifying 90% subsidiaries.

• A qualifying business activity is either a trading activity (Activity A) or a research and development activity (Activity B), carried on by the issuing company or a qualifying 90% subsidiary.
• Activity A covers a qualifying trade already being carried on when the shares are issued, or preparations for a qualifying trade that is intended at that date and actually begins within two years.
• Activity B covers research and development being carried on (or begun immediately after the share issue) from which a qualifying trade is expected to arise or benefit.
• Any trade or research and development carried on by a subsidiary before it became a qualifying 90% subsidiary is disregarded, and references to such a subsidiary include any company that will become one in the future.