Finance Act 2002

Part 3 Time allowed for VCT to invest money raised by further share issue

Power to disapply, or limit operation of, section 842AA(5B) of the Taxes Act 1988

11 (1) Regulations may make provision for section 842AA(5B) of the Taxes Act 1988 (use of money raised by VCT’s further issue of shares disregarded during grace period)—

(a) not to apply, or to be treated as not having applied, in specified cases;

(b) to apply, or to be treated as having applied, in specified cases—

(i) only to a specified extent;

(ii) only if specified conditions (including conditions requiring approvals to be obtained) are satisfied.

(2) Provision made by regulations under sub-paragraph (1) may (but need not) be made so that, in any particular case, section 842AA(5B) of the Taxes Act 1988—

(a) does not apply, or is treated as not having applied, at prescribed times or with effect as from a prescribed time, or

(b) applies, or is treated as having applied, in accordance with provision made under sub-paragraph (1)(b) at prescribed times or with effect as from a prescribed time.

(3) Regulations under sub-paragraph (1) may make provision in relation to shares issued on or after 17th April 2002.

(4) In sub-paragraph (1) “specified” means specified by regulations and in sub-paragraph (2) “prescribed” means specified by, or determined under, regulations.

Withdrawal of VCT approval in cases for which provision made under paragraph 11

12 (1) Regulations may make provision for withdrawal of approval of a company for the purposes of section 842AA of the Taxes Act 1988 (venture capital trusts) to be treated—

(a) in a case where the withdrawal is by reference to a condition for approval that would have been, or would be, fulfilled but for provision made under paragraph 11, and

(b) for purposes of enactments specified by regulations,

as having taken effect as from a time specified in the notice of the withdrawal that is earlier than the time when the notice is given to the company.

(2) Provision made under sub-paragraph (1) has effect subject to the provisions of section 842AA(9) of the Taxes Act 1988 (retrospective effect of notices of withdrawal of VCT approval) as to the earliest time that may be specified by such a notice.

Consequential amendment in section 842AA(5A) of the Taxes Act 1988

13 In section 842AA(5A) of the Taxes Act 1988 (subsection (5B) applies where VCT makes further issue of shares), after “Subsection (5B) below applies” insert “, subject to any regulations under paragraph 11 of Schedule 33 to the Finance Act 2002,”.