Part 6Venture capital trusts
Chapter 1Introduction
258Overview of Part
In this Part—
a
Chapter 2 provides for VCT income tax relief (“VCT relief”), that is, entitlement to tax reductions in respect of amounts subscribed by individuals for shares issued to them by venture capital trusts,
b
Chapter 3 provides for VCT approvals,
c
Chapter 4 makes provision as to the meaning of “qualifying holding” for the purposes of Chapter 3,
d
Chapter 5 confers power for regulations to make provision in relation to the winding up and merger of venture capital trusts, and
e
Chapter 6 makes supplementary and general provision.
259Venture capital trusts and VCT approvals
1
In this Part “venture capital trust” means a company which—
a
is not a close company, and
b
is for the time being approved for the purposes of this Part by the Commissioners for Her Majesty’s Revenue and Customs (see Chapter 3),
and “VCT” means a venture capital trust.
2
In this Part “VCT approval” means an approval of a company for the purposes of this Part.
260Other tax reliefs relating to VCTs
1
Chapter 5 of Part 6 of ITTOIA 2005 (venture capital trust dividends) provides that, if conditions are met, no liability to income tax arises in respect of dividends paid in respect of shares in a VCT.
2
Section 100 of TCGA 1992 (exemption for venture capital trusts etc) provides that gains accruing to a VCT are not to be chargeable gains.
3
Section 151A of TCGA 1992 (venture capital trusts: reliefs) provides that a gain or loss accruing to an individual on a qualifying disposal of any ordinary shares in a company which—
a
was a VCT at the time when the individual acquired the shares, and
b
is still a VCT at the time of the disposal,
is not to be a chargeable gain or, as the case may be, an allowable loss.
4
Schedule 5C to TCGA 1992 (venture capital trusts: deferred charge on re-investment, but only in relation to shares issued before 6 April 2004) provides that, if conditions are met, an individual’s unused qualifying expenditure on shares in a VCT may be set against what would otherwise be chargeable gains.