Income Tax Act 2007 (c. 3)

Part 6 U.K. Venture capital trusts

Chapter 4 U.K. Qualifying holdings

The requirements U.K.

[F1 297A The number of employees requirement U.K.

(1) If the relevant company is a single company, the full-time equivalent employee number for it must be less than [F2 the permitted limit] when the relevant holding is issued.

(2) If the relevant company is a parent company, the sum of—

(a) the full-time equivalent employee number for it, and

(b) the full-time equivalent employee numbers for each of its qualifying subsidiaries,

must be less than [F3 the permitted limit] when the relevant holding is issued.

(3) The full-time equivalent employee number for a company is calculated as follows—

Step 1

Find the number of full-time employees of the company.

Step 2

Add, for each employee of the company who is not a full-time employee, such fraction as is just and reasonable.

The result is the full-time equivalent employee number.

[F4 (3A) The permitted limit” means—

(a) if the relevant company is a knowledge-intensive company at the time the relevant holding is issued (see section 331A), 500, and

(b) in any other case, 250.

(3B) The Treasury may by regulations amend subsection (3A)(a) or (b) by substituting a different number for the number for the time being specified there.]

(4) In this section references to an employee—

(a) include a director, but

(b) do not include—

(i) an employee on maternity [F5 , paternity [F6 , shared parental or parental bereavement]] leave, or

(ii) a student on vocational training.]

Textual Amendments

F1 S. 297A inserted (retrospective to 6.4.2007) by Finance Act 2007 (c. 11), Sch. 16 para. 3(3)(5) (with Sch. 16 para. 3(6), (7))

F2 Words in s. 297A(1) substituted (with effect in accordance with Sch. 6 para. 23(3) of the amending Act) by Finance (No. 2) Act 2015 (c. 33), Sch. 6 para. 12(a)

F3 Words in s. 297A(2) substituted (with effect in accordance with Sch. 6 para. 23(3) of the amending Act) by Finance (No. 2) Act 2015 (c. 33), Sch. 6 para. 12(a)

F4 S. 297A(3A)(3B) inserted (with effect in accordance with Sch. 6 para. 23(3) of the amending Act) by Finance (No. 2) Act 2015 (c. 33), Sch. 6 para. 12(b)

F5 Words in s. 297A(4)(b)(i) substituted (1.12.2014) by Children and Families Act 2014 (c. 6), s. 139(6), Sch. 7 para. 72; S.I. 2014/1640, art. 5(2)(cc)

F6 Words in s. 297A(4)(b)(i) substituted (18.1.2020) by Parental Bereavement (Leave and Pay) Act 2018 (c. 24), s. 2(2), Sch. para. 54; S.I. 2020/45, reg. 2