VCM60622 - Venture capital trust (VCT) scheme: General: Return of investments made by VCT - identifying investments funded by different issues of shares - protected money
Over time a number of VCT provisions have limited the definition of qualifying holding for investment of funds raised by share issues that take place after a particular date while preserving the extended definition for investment of money raised by earlier issues.
The statute has employed a number of different wordings to identify the relevant funds and investments for each change. For the purpose of these instructions the term used in the 2006 and 2007 amendments, “protected money”, is used to indicate the money raised by an issue of shares (or money derived from the investment of that money) before a relevant change took place.
Investment out of protected money in respect of any relevant change can continue to be made in accordance with the rules prior to that change.
The protection applies not only to the money raised directly by the share issue but also to money which is derived from it indirectly as a result of the investment of that money.
The provisions in relation to which certain monies are protected are:
| Provision | Protection of money raised by issues before | See |
| Rules requiring a minimum equity content for the investment and outlawing guaranteed loans | 2 July 1997 | VCM62030, VCM62040 |
Amendments of the rules on qualifying trades adding:
|
17 March 1998 | VCM17140 VCM17150 VCM17170 VCM17160 |
| Amendment of the gross assets test limiting the size of qualifying companies | 6 April 2006 | VCM15100 |
| Introduction of the employee limit test and the limit on the amount of money raised annually by a company (“the tranche test”).Introduction of the 70% eligible shares condition | 6 April 2007 6 April 2011 |
VCM15105 VCM12055 VCM60140 |
