VCM60110 - VCT scheme: general: approval: conditions for full approval

ITA/S274: SI1995/1979 Regulation 4

To be approved as a VCT a company must not be a close company and must satisfy HMRC that in relation to its most recent complete accounting period:

The nature of income conditionits income in that accounting period was derived wholly or mainly from shares or securities (see VCM60130);
The 70% qualifying holdings conditionat least 70% by value of its investments were in qualifying holdings of shares or securities throughout that accounting period (see VCM60135 onwards);
The 30% eligible shares conditionat least 30% by value of its qualifying holdings were in holdings of eligible shares throughout that accounting period (see VCM60140);
The 15% holding limit conditionno holding in any company represented more than 15% by value of the VCT’s investments at any time during that accounting period (see VCM60160);
The listing conditionits ordinary share capital was included in the official UK list throughout that accounting period; and
The income retention conditionit did not retain more than 15% of its income derived in that accounting period from shares and securities (see VCM60170).


With effect from 6 April 2007 the term ‘investment’ throughout ITA/Part 6 Chapter 3 includes cash and other funds held by the VCT or held by a third party on its behalf- see VCM60135.

The company must also satisfy CT&VAT London that these conditions will be met in relation to the accounting period which is current when the application for approval is made.

However, if the VCT issues further ordinary shares, the relaxation described in VCM60180 will apply.

A company satisfying these conditions will receive an approval notice specifying:

  • the date on which the approval is given, and
  • the date from which approval shall have effect.