Finance Act 2006

Part 5 Venture capital trusts: meaning of “investments”

8 (1) In section 842AA of ICTA (venture capital trusts: conditions for approval), after subsection (11) insert—

“(11A) A reference in this section, or in section 842(2)(b) as applied by subsection (11)(a) above, to a company’s investments shall be taken to include, so far as it would not otherwise do so,—

(a) money in the company’s possession, and

(b) any sum owed to the company by another person if the company has account-holder’s rights over that sum.

(11B) For the purposes of subsection (11A)(b) above, a company has “account-holder’s rights” over a sum owed to the company if—

(a) the company has a right (whether or not the exercise of the right is subject to conditions) to require the other person to pay out the sum, or amounts out of the sum, to the company or at the company’s direction, and

(b) the sum is owed to the company—

(i) as a result of amounts having been paid to the other person by or for the company, or

(ii) as a result of the other person having identified a sum in respect of which the company may exercise such a right.

(11C) Subsection (11A) above does not have effect to cause a company’s investments to be taken to include anything to which the company is not beneficially entitled, but for this purpose a company shall be taken to be beneficially entitled to—

(a) sums subscribed for shares issued by it, and

(b) anything to which it is entitled that (directly or indirectly) represents any such sums.”

(2) Sub-paragraph (1) has effect for the purposes of determining whether, at a time on or after 6th April 2007, the conditions specified in section 842AA(2) of ICTA are, will be or were fulfilled with respect to a company.