Commentary on Sections Overview Overview Section 168: Directors excluded from connection
557.This section provides that an individual will, in specific circumstances, not be connected with the issuing company. It is based on sections 291(5) and 291A(1), (2), (3) and (6) of ICTA.
558.This section allows, in limited cases, the investor to be eligible for EIS relief in relation to a share issue even if the investor (or an associate) is a director of the issuing company. Such limited cases broadly include those where:
	the sole reason for connection would have been the relationship as director; but
	in relation to the period over which connection is tested;there are no payments to the individual (or to certain other persons), and no entitlement to such payments, from the issuing company (or from certain other persons), orany such payments fall to be disregarded by virtue of subsection (2).
559.Subsection (4)(a)(i) narrows the definition of “related person”. See Change 39 in Annex 1.
560.The meaning of “connected” in subsection (4)(a)(ii) is found in section 993. This differs from the other references to “connected” in this Chapter, which take their meaning from section 166.
561.The words “at any time in period A” in subsection (5) are needed to convey the full meaning of the expression “51% subsidiary” in section 291A(6) of ICTA. For the source legislation, this expression has a specific definition in section 312(1) of ICTA, but this is not reproduced in the rewritten EIS sections. Instead a “51% subsidiary” in this Part takes its meaning from section 838 of ICTA - see section 989.