VCM68060 - VCT: deferral relief: HMRC power to extend time limits

TCGA92/SCH5C/PARA1 (3)

HMRC will extend the time limits where the claimant can show that he or she:

• had a firm intention to comply with the time limits, but
• was prevented by some fact or circumstance beyond his or her control from complying, and
• acted as soon as he or she reasonably could after ceasing to be so prevented.

It is a question of fact and degree and each case is considered on its own merits. Examples of circumstances outside the claimant's control might include death or serious illness of a vital party at a crucial time, unsettled disputes or litigation or unexpected delay in receipt of disposal consideration.

A mere change of intention at a late stage or a shortage of funds arising out of the application of the disposal consideration to some purpose other than the subscription for VCT shares will not normally be regarded as circumstances beyond the claimant's control. In particular, where a claimant chooses to defer applying for shares until late in the statutory reinvestment period any subsequent issue of shares outside that period will not normally be regarded as a circumstance beyond the claimant's control justifying an extension to the time limit.

No decision on a possible extension of the time limits can be made until the disposal has taken place, the VCT shares have been issued and all other conditions of relief are satisfied.

No extension of the time limit can result in VCT shares issued after 5 April 2004 qualifying for deferral relief.

If the VCT shares have been issued outside the statutory time limits and a request is made for an extension you should explain the criteria set out above to the claimant so that they can demonstrate their case. You should then make a report to CGT, Solihull with your recommendation and the claimant's file.

VCT deferral relief is abolished for shares issued after 5 April 2004.