The Venture Capital Trust (Winding up and Mergers) (Tax) (Amendment) Regulations 2011

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations make amendments to the Venture Capital Trust (Winding up and Mergers) (Tax) Regulations 2004 (“the 2004 Regulations”) consequent upon the coming into force of amendments made to the Income Tax Act 2007 (“the 2007 Act”) by the Finance (No. 3) Act 2010 (“the 2010 Act”).

Regulation 1 provides for citation, commencement and effect.

Regulation 2 introduces the amendments to the 2004 Regulations.

Regulation 3 amends regulation 2 of the 2004 Regulations by making new interpretative provisions consequent on the amendments to the 2007 Act by the 2010 Act. In particular, the amendment to the definition of the 30% test reflects the fact that this requirement now applies only to either a) shares purchased with money raised before the commencement of the amendments made by the 2010 Act to section 274 of the 2007 Act or b) shares purchased before the commencement of the amendments made by the 2010 Act.

Regulations 4 to 12 amend regulations 3, 4, 6, 8, 9, 11, 12, 13 and 14 of the 2004 Regulations by substituting references to the 2007 Act for references to provisions in the Income and Corporation Taxes Act 1988.

Regulation 13 substitutes references to “Commissioners” for references to “Board” in regulations 3, 9, 10 and 14 of the 2004 Regulations.

The impact on business, charities or voluntary bodies and the public sector were recorded in an Impact Assessment covering the primary legislation which these Regulations help to implement. The Impact Assessment can be found at: http://www.hmrc.gov.uk/budget2010/vent-cap-ent-man-ia-2540.htm.