(1)An individual (“A”) is eligible for VCT relief for a tax year if—
(a)a VCT issues eligible shares to A in that year,
(b)the VCT issues the shares for raising money, and
(c)A subscribes for the shares on A's own behalf.
(2)The amount in respect of which A is eligible for VCT relief for the tax year by reference to any shares is the amount subscribed by A for the shares.
(3)A is eligible for VCT relief by reference to any shares only if—
(a)the shares are both subscribed for and issued—
(i)for genuine commercial reasons, and
(ii)not as part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax, and
(b)A is at least 18 years old when the shares are issued.
(4)A is not eligible for VCT relief by reference to any shares if they are treated as issued to A by virtue of section 195(8) of FA 2003 (tax treatment of disposal by company of its own shares).
See section 271(4) for provision requiring the giving of notices about the effect of this subsection.
(1)An individual (“A”) who is eligible for VCT relief by reference to shares issued in a tax year is entitled to claim VCT relief for that year.
(2)A is entitled to claim VCT relief in respect of the amount on which A is eligible for VCT relief by reference to all or some of the shares.
This is subject to subsection (3).
(3)A is not entitled to claim VCT relief for any tax year on an amount of more than £200,000.
(1)An individual who—
(a)is entitled to claim VCT relief for a tax year, and
(b)claims such relief for the year on any amount,
is entitled to a tax reduction for the year.
(2)The tax reduction is equal to 30% of the amount in respect of which the claim is made.
(3)The tax reduction is given effect at Step 6 of the calculation in section 23.
(1)An individual is not entitled to VCT relief by reference to any shares (“the relevant shares”) if a linked loan is made by any person, at any time in the relevant period, to the individual or an associate of the individual.
(2)References in this section to the making by any person of a loan to an individual or any associate of the individual include references—
(a)to the giving by that person of any credit to the individual or any associate of the individual, and
(b)to the assignment to that person of any debt due from the individual or any associate of the individual.
(3)In this section—
“linked loan” means a loan which—
would not have been made, or
would not have been made on the same terms,
if the individual had not subscribed for the relevant shares or had not been proposing to do so,
“the relevant period”, in relation to VCT relief in respect of any shares in a company which is a VCT, means the period—
beginning with—
the incorporation of the company, or
if later, the date two years before the issue of the shares, and
ending immediately before the fifth anniversary of that issue.
(1)This section applies where—
(a)an individual subscribes for shares (“the relevant shares”) in a VCT (“the VCT”), and
(b)there is at least one linked sale of other shares by the individual.
(2)For the purposes of this Part, the amount the individual subscribes for the shares is to be treated as reduced (but not below nil) by the total consideration given for the linked sales of other shares.
This is subject to subsection (3).
(3)If a sale is linked in relation to more than one subscription for shares—
(a)the consideration for it is to be applied to reduce subscriptions under subsection (2) in the order in which the subscriptions are made, and
(b)accordingly, to the extent that any consideration has been used to reduce an earlier subscription, it is not available to reduce a later one.
(4)A sale of shares (“the sold shares”) is “linked” if conditions A and B are met.
(5)Condition A is that the sold shares are in—
(a)the VCT, or
(b)a company which is (or later becomes) a successor or predecessor of the VCT.
(6)Condition B is that—
(a)the individual subscribes for the relevant shares in circumstances where—
(i)the purchase of the sold shares from the individual was conditional upon the individual subscribing for shares in the VCT, or
(ii)the individual's subscription for shares in the VCT was conditional upon that purchase, or
(b)the subscription for the relevant shares and the sale of the sold shares are within 6 months of each other (irrespective of which came first).
(7)A company (“company X”) is a “successor or predecessor of the VCT” if—
(a)there is a merger of two or more companies for the purposes of Chapter 5 (see section 323) and—
(i)the VCT is one of the merged companies and company X is “the successor company” (as defined by that section), or
(ii)the VCT is “the successor company” and company X is one of the merged companies, or
(b)section 327 (effect of restructuring of VCT) applies and—
(i)the VCT is “the old company” and company X is “the new company” for the purposes of that section, or
(ii)company X is “the old company” and the VCT is “the new company” for those purposes.
(8)This section does not apply if, or to the extent that, the subscription for the relevant shares is a result of the individual electing to reinvest dividends payable to the individual on shares in the VCT, in acquiring further shares in the VCT.]
Textual Amendments
F1S. 264A inserted (with effect in accordance with Sch. 10 para. 2(2) of the amending Act) by Finance Act 2014 (c. 26), Sch. 10 para. 2(1)
An individual is not entitled to VCT relief by reference to any shares if circumstances have arisen which would have resulted in the withdrawal or reduction of the relief, if that relief had already been obtained.