VCM12090 - The investment process: employment of money: time limit for

ICTA/S289 (3); ITA/S175; TCGA92/SCH5B/PARA1 (2)(g); FA00/SCH15/PARA36

The time limits relating to the employment of money depend on the date on which the shares were issued.

Shares issued before 22 April 2009

For the EIS and the CVS, the time limit within which the money raised by the issue of the shares, and of all other shares of the same class issued on the same day, must be employed is as follows:

• at least 80% of it must be employed within 12 months after the date of issue, except where the activity consists of preparing to carry on a trade, in which case the time limit is 12 months after the date when the trade begins;
• any money remaining must be employed within the following 12 months.

Shares issued on or after 22 April 2009

For the EIS and the CVS, all of the money raised by the issue of shares must be employed within two years of the date of issue, except where the activity consists of preparing to carry on a trade, in which case the time limit is two year after the date when the trade begins. The condition no longer applies to other shares of the same class issued on the same day.

For all share issues, regardless of date of issue

Where a company submits form EIS1 or form CVS1 before either of the time limits for employment of the money has expired, and not enough money has as yet been employed to satisfy the statutory conditions, it is required to make a declaration on the form that the conditions will be complied with.

For the VCT scheme, see VCM62150.