The Venture Capital Trust (Winding up and Mergers) (Tax) Regulations 2004

Interpretation

2.—(1) In these Regulations unless the context otherwise requires–

“the Board” means the Commissioners of Inland Revenue;

“eligible shares” has the meaning in Part 1 of Schedule 15B(1);

“the 15% test” means the condition specified in section 842AA(2)(d)(2);

“market value” shall be construed in accordance with sections 272 and 273 of the 1992 Act;

“merger” of two or more companies (and the associated definitions of “the merging companies” and “the successor company”) shall bear the appropriate meanings given by paragraph 10 of Schedule 33;

“the 1992 Act” means the Taxation of Chargeable Gains Act 1992(3);

“prescribed winding-up period”, in relation to a VCT-in-liquidation, means the period –

(a)

beginning on the commencement of the company’s winding up, and

(b)

ending on the earliest of –

(i)

the end of the company’s winding up,

(ii)

the company ceasing to be wound up,

(iii)

the dissolution of the company, and

(iv)

the third anniversary of the commencement of the winding up;

“qualifying holdings” has the meaning in Schedule 28B(4);

“Schedule 33” means Schedule 33 to the Finance Act 2002;

“securities”, except in regulation 12, has the same meaning as in section 842AA(12);

“the 70% test” means the condition specified in section 842AA(2)(b);

“the 30% test” means the condition specified in section 842AA(2)(c);

“statement of affairs” means a statement as to the affairs of a company, in the form prescribed under and complying with section 99 or 131 of the Insolvency Act 1986(5), as the case may be;

“the Taxes Act” means the Income and Corporation Taxes Act 1988(6);

“VCT approval” has the meaning given by paragraph 7(4) of Schedule 33, and any reference to such approval taking effect shall have the same meaning as in section 842AA;

“VCT-in-liquidation” has the meaning given by paragraph 1(1) of Schedule 33;

“venture capital trust” has the meaning given by section 842AA(1).

(2) In regulations 9 to 14 and this paragraph—

a “paragraph 10(1) merger” means a merger described in paragraph 10(1) of Schedule 33;

a “paragraph 10(2) merger” means a merger described in paragraph 10(2) of Schedule 33;

“share for business transfer” means an issue of shares as mentioned in paragraph 10(1)(b) or (2)(b) of Schedule 33 (in each case, omitting sub-paragraph (i) and the word “or” which follows it);

“share for share exchange” means an exchange of shares for shares as mentioned in paragraph 10(1)(b) or (2)(b) of Schedule 33 (in each case, omitting sub-paragraph (ii) and the word “or” which follows sub-paragraph (i));

“shares issued to effect the merger”—

(a)

in the case of a paragraph 10(1) merger, means shares in the successor company issued as mentioned in paragraph 10(1)(b) of Schedule 33, and

(b)

in the case of a paragraph 10(2) merger, means shares in the successor company issued as mentioned in paragraph 10(2)(b) of Schedule 33;

“shares issued for new consideration” means shares in the successor company, issued in the period during which the merger takes place, for a consideration other than as mentioned in paragraph 10(1)(b) or (2)(b) of Schedule 33.

(3) References in these Regulations to a section or Schedule (excepting Schedule 33), without more, are to that section of or Schedule to the Taxes Act.

(4) Paragraph 7(5) of Schedule 33 (acts of a liquidator attributed to the company) shall apply for the purposes of regulations 3 to 8 as it applies to Part 1 of Schedule 33.

(5) References to a resolution passed, or petition presented, to wind up a company (or other references to insolvency procedure) shall, where the winding up is wholly or partly other than under the law of England and Wales, include references to the corresponding local equivalents.

(1)

1988 c. 1; Schedule 15B was inserted by section 71(2) of the Finance Act 1995 (c. 4).

(2)

Section 842AA was inserted by section 70(1) of the Finance Act 1995; there are no relevant amendments.

(3)

1992 c. 1.

(4)

Schedule 28B was inserted by section 70(2) of the Finance Act 1995.

(5)

1986 c. 45.

(6)

1988 c. 1.