Part 6Venture capital trusts

Chapter 2VCT relief

Entitlement to relief

264No entitlement to relief if there is a linked loan

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—

    1. a

      would not have been made, or

    2. b

      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—

    1. a

      beginning with—

      1. i

        the incorporation of the company, or

      2. ii

        if later, the date two years before the issue of the shares, and

    2. b

      ending immediately before the fifth anniversary of that issue.