Individual holds 20% of a company that itself holds 20% of a company considering an EIS issue of shares. The individual is also a director of the top company but otherwise is unconnected with the 'EIS' company. I'm happy that he meets/will meet the 30% direct/indirect test for connection. However, will he meet the requirements of s164A? That section simply refers to an existing holding by the individual of shares in the issuing company - I can find no reference to direct or indirect holding so on a strict reading it would seem that s164A should not apply. Thoughts anyone?
Thanks
The other 80% of the issuing company is held by various unconnected individuals - the independence test is/will be met.
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The issuing company is a 20% subsidiary of the top company - who holds the remaining 80%? Is the independence requirement in s. 185 ITA satisfied?