VCM60624 - VCT scheme: general: return of investments made by VCT: identifying investments funded by different issues of shares: completing the return

The VCT is required to identify the source of funding of a given investment on its annual return if the origin of the funds is relevant to the question of either

whether that investment has breached any of the conditions for a qualifying investment,

or

whether the investment should be included when calculating the 70% qualifying holding condition and the 30% eligible shares condition.

VCM60628 explains how the origin of funds can be demonstrated.

If the origin of the funds is not relevant, for example where an investment in a company would be a qualifying investment regardless of the date on which the funds were raised, and the investment is not within 3 years of a further issue then the VCT is not required to indicate the origin of the funds for that investment on the return.

If the VCT raised funds only on one date then all its funds will have the same origin in relation to the protected money rules. In this case it should indicate the protected money status of its total funds on the return.

For instance, if all funds were raised before 6 April 2006 and the VCT invests in any number of companies that would meet the old gross assets test but not the new one, it is sufficient for the VCT to indicate on its return that all investments are out of money that is protected with respect to the FA2006 gross asset test.