VCM60153 - VCT scheme: general: exchange of shares or securities in same company: valuation of retained shares

SI2661/2002 Regulation 7(3) & (4)

ITA/S274, S278 & S289

When a VCT exchanges old shares or securities for new shares or securities in the same company (see VCM60152) the VCT may retain some shares or securities which are not included in the exchange.

Immediately after the exchange the old shares and securities which have been exchanged are cancelled or otherwise extinguished. The retained shares or securities continue to be valued at their value (or apportioned value) when last valued before the exchange. And the ITA/S278 value continues until there is a revaluation event - see VCM60150.

This valuation of the retained shares also applies for the calculation of the 10% eligible shares rule in ITA/S289- see VCM62030.