If the following conditions are met, an individual may elect for this section to have effect.
The first condition is that, as a result of a relevant share issue, the company ceases to be the individual's personal company.
The second condition is that—
Where this section has effect, the individual is to be treated for the purposes of this Act—
at their relevant value.
In this section—
"material disposal of business assets" and "personal company" have the same meanings as in Chapter 3 (see section 169S),
"relevant share issue" means an issue of shares by the company where—
(a)the shares are issued by the company for consideration consisting wholly of cash, and
(b)the shares are subscribed, and issued, for genuine commercial reasons and not as part of arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage to any person, and
"relevant value" means—
(a)in relation to an asset consisting of shares, an amount equal to the consideration that would be apportioned to the asset if, immediately before the relevant share issue, the whole of the issued share capital of the company were sold for a consideration equal to its market value at that time, or
(b)in relation to any other asset, its market value at the time of the relevant share issue.
For the purposes of the definition of "relevant share issue" in subsection (5)—
"arrangements" includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), and
"tax advantage" means— and for the purposes of this definition "tax" means capital gains tax, corporation tax or income tax.
(a)relief or increased relief from tax,
(b)repayment or increased repayment of tax,
(c)the avoidance or reduction of a charge to tax or an assessment to tax, or
(d)the avoidance of a possible assessment to tax,
In this Chapter—