What does "subscription" actually meand

In the contect of director's loan account etc.

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I was looking at the new investor's relief rules. One of which is that the company has to be trading at the time that the shares are issued. The shares have to be subscribed.

I was wondering if an investor had a loan account with the company if the company could issue shares to the investor and these shares be eligible for relief.

I have some suspicion that this would be seen as a conversion of the loan account rather than a subscription for shares. But what would stop the company asking the investor to subscribe for the shares, partly paid up, and then contra the loan account and the amount due on the shares?

It comes back to what a "subscription" actually means. Could someone point me to a Company / Taxes Act definition?

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paddle steamer
By DJKL
30th Sep 2016 16:30

http://www.publications.parliament.uk/pa/bills/lbill/2016-2017/0061/1706...

Schedule 14

169VU “Subscribe” etc (1) For the purposes of this Chapter (other than this subsection) a person “subscribes for” a share in a company if— (a) that person subscribes for the share, (b) the share is issued to that person by the company for consideration consisting wholly of cash, (c) the share is fully paid up at the time it is issued, (d) the share is subscribed for, 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 (e) the share is subscribed for, and issued, by way of a bargain at arm’s length. (2) In subsection (1) “arrangements” and “tax advantage” have the same meaning as in section 16A.

I suspect I would wish to sort company bridging so that company could repay the loan to the individual to enable the individual to subscribe in cash, not sure a loan converted to shares is a safe way of navigation, however sure others will differ.

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