VCM60410 - Venture capital trust (VCT) scheme: General: Maintaining approval - where provisional approval given

ITA/S274(2) & S275

Where a company has provisional approval, it must ensure that:

  • in relation to the accounting period which is current when the approval application is made or the next accounting period, and the following accounting periods:

    • its income in them is derived wholly or mainly from shares or securities (see VCM60130)
 (the nature of income condition);
    • no holding represents more than 15% by value of its investments at any time during them (see VCM60160)
 (the 15% holding limit condition);
    • its ordinary share capital is included in the official UK list throughout them
 (the listing condition); from 6 April 2011 this condition is satisfied if the VCT is admitted to trading on a regulated market; a regulated market has the same meaning as in Directive 2004/39/EC of the European Parliament (see VCM60111); and
    • it does not retain more than 15% of its income derived in them from shares and securities (see VCM60170); and
 (the income retention condition).
  • In addition, by an accounting period beginning no more than three years after approval is given, and in the following accounting periods:
    • at least 70% by value of its investments are in qualifying holdings of shares or securities throughout the accounting period (see VCM62000 onwards)
 (the 70% qualifying holdings condition);
    • at least 30% by value of its qualifying holdings are in holdings of eligible shares throughout the accounting period (see VCM60140)
(the 30% eligible shares condition);  
    • from 6 April 2011 at least 70% by value of its qualifying holdings were in eligible shares throughout that accounting period; this applies to shares acquired by money raised after this date (see VCM60140) 
 (the 70% eligible shares condition);
  • and any additional conditions included in the approval notice are met (see VCM60120).

However, if further ordinary shares are issued VCM60180 will apply.

Where any of these conditions are not met, approval may be withdrawn (ITA/S281).

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