VCM60620 - VCT scheme: general: return of investments made by VCT: identifying investments funded by different issues of shares

Where applicable, a VCT return will need to specify the source of funding for particular investments.

This will be necessary when a VCT wishes to benefit from provisions which:

• limit the application of restrictions to rules relating to qualifying holdings to cases where investments are made out of funds first raised after particular dates (see VCM60622), or
• direct that the use of money directly or indirectly raised by a “further issue” of shares is temporarily disregarded for the purpose of the 70% qualifying holdings condition and the 30% eligible shares condition (see VCM60180).

In the first case the VCT will need to be able to demonstrate that investments that fail to satisfy the more restrictive rule were acquired with money raised by an issue of shares that took place before a certain date (or acquired with funds that were ultimately derived from the investment of such money).

In the second case where the VCT is disregarding any investments or money it will need to demonstrate that the investments or money being disregarded have been directly or indirectly funded out of the money raised by the further issue ( VCM60624).