VCM45650 - VC loss relief: general: qualifying trading company: shares issued on or after 6 April 1998: eligible trading company

ICTA88/S576 (4), (4A) & (4B)

For shares issued after 5 April 1998 the definition of a qualifying trading company adopts some of the concepts of the EIS legislation. ICTA88/S576 (4) provides that a company has to be an eligible trading company throughout certain periods (see VCM45600). An eligible trading company is a company that would meet the requirements of ICTA88/S293 and be a qualifying company for the purposes of the EIS. ICTA88/S576 (4A) and (4B) provide that some minor amendments are made to ICTA88/S293 (and to the other section referred to in that section) for these purposes so that they apply in the context of ICTA88/S573 to ICTA88/S576.

Essentially the company has to:

• exist to carry on to a significant extent a qualifying trade, or be the parent company of a group that exists to carry on to a significant extent such a trade (see VCM15030 onwards), and
• not have gross assets of more than £15 million immediately before the shares are issued, or £16 million immediately after the shares are issued (see VCM15100).