VCM45600 - VC loss relief: general: qualifying
trading company: shares issued on or after 6 April 1998
ICTA88/S576 (4)
FA98 introduced changes to VC loss relief that affect:
- for disposals made on or after 6 April
1998, the rules in ICTA88/S576 (1) that apply where the claimant
has a ‘mixed holding’ (that is some of the shares held
qualify for relief and some do not - see
VCM47000 onwards), and
- for shares issued on or after 6 April
1998, the rules in ICTA88/S576 (4) that identify what is a
qualifying trading company.
For shares issued on or after 6 April 1998 a
qualifying trading company is a company satisfying
each of the following four conditions:
- The company must have been:
- an unquoted company within the EIS meaning of that
expression (see
VCM15020) when the shares were issued,
and
- there must have been no arrangements in place then
for it to cease to be an unquoted company, and
- in relation to shares issued before 7 March 2001,
the company must not have ceased to be an unquoted company before
that date.
- be an eligible trading company for the purposes of
ICTA88/S576 (see
VCM45650)at the date of disposal,
or
- have ceased to be such a company at a time not
more than three years before the date of disposal and not, since it
ceased to be such a company, have been an excluded company (see
VCM45500), an investment company (see
VCM49150) or a trading company (see
VCM45550) that is not an eligible
trading company.
- have been an eligible company for a continuous
period of six years ending on the date of disposal, or at the time
of cessation of trading where this was not more than three years
before the date of disposal, or
- have been an eligible company for a shorter
continuous period ending on the date of disposal, or at the time of
cessation of trading where this was not more than three years
before the date of disposal, and not have been before the beginning
of that period of trading an excluded company, an investment
company or a trading company that was not an eligible trading
company.
- The company must have carried on its
business wholly or mainly in the United Kingdom throughout the
relevant period (see
VCM45450).
These conditions are similar to those described in
VCM45350, which applied to shares issued
before 6 April 1998. The changes made by FA98 align the
requirements for companies to which the VC loss relief regime
applies with those qualifying for companies that could qualify for
the EIS.
