VCM60152 - VCT scheme: general: exchange of shares or securities in same company: valuation of new holding
SI2661/2002 Regulation 7(2) & (4)
ITA/S278(5) & (6), ITA/S289
A VCT can exchange a holding of ‘old’ shares or
securities in a company for ‘new’ shares or securities
in the same company (see
VCM62380).
The ‘new’ shares or securities are valued for the
15% holding limit condition, the 70% qualifying holding condition
and the 30% eligible shares condition) (see
VCM60110) as follows.
The aggregate value of the new shares and new securities is
calculated immediately after the old shares and securities are
cancelled or otherwise extinguished using the formula below. This
value will then be used until the shares or securities fall to be
revalued in accordance with ITA/S278(3)) (see
VCM60150).
The formula is:
|
| Nv = | Ov x | Nmv |
|
|
|
| Nmv + C |
where
| Nv = | the aggregate value of the new shares and securities that you are calculating |
| Ov = | the aggregate value of the old shares and securities when they were last valued (see VCM60150) |
| Nmv = | the aggregate market value of the new shares and securities immediately after the old shares and securities are cancelled or otherwise extinguished |
| C = | the aggregate market
value immediately after the old shares and securities are cancelled
or otherwise extinguished of:
(i) any monetary amount, (ii) any monetary amount (without any discount for postponement of the right to receive payment or any part of it), and (iii) any other consideration of receipt (except the new shares and securities, received by the VCT as consideration for, or in respect of, the old shares or securities. |
This same method of valuation is to be used to check that
each qualifying holding comprises at least 10% eligible shares,
ITA/S289 (see
VCM62030).
If some ‘old’ shares or securities are not
included in the exchange, see
VCM60153.
Where the value of the new shares or new securities issued to
the VCT needs to be apportioned, see
VCM60157.
