When an EIS company is taken over, the acquiring company may issue its own shares in exchange for the original shares.

The treatment of share exchanges where at the time of the exchange

deferral relief has been given and not withdrawn AND

where all income tax relief given has been withdrawn

changed where the new shares in exchange were issued on or after 22 April 2009 (TCGA92/Sch 5B/Para 9).

For share exchanges on or after that date where the above conditions are met, S135 -S137 TCGA 1992 is disapplied, so that the shares are treated as disposed of, only for the purposes of Sch 5B paras 3 and 4.

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