VCM62020 - Venture capital trust (VCT) scheme: Qualifying holdings: Requirements
The requirements which a holding has to satisfy in order to be part of the VCT's qualifying holdings fall broadly into three groups, covering:
- the form of the investment (VCM62030 to VCM62120),
- the type of company invested in (VCM62160 to VCM62336),
- the way in which the money raised is to be used (VCM62150 to VCM62153).
Since the original enactment of the scheme in 1995, some of the requirements have been amended and some new requirements have been added. Generally such changes take effect for determining the status of a holding at any date subsequent to the date when they are made, but in certain cases they apply only where the money used to make the investment was originally raised by the VCT after that date. These cases are as follows:
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New rules requiring a minimum equity content for the investment (see VCM62030) and outlawing guaranteed loans (see VCM62040). |
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Amendments to the rules on qualifying trades adding to the list of excluded activities.(see VCM17030). |
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Amendment to the gross assets test reducing the size of qualifying companies (see VCM15100). |
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Amendment to the eligible shares percentage limit (see VCM60140). |
Thus a VCT which raised all its money by a share issue before 2 July 1997 will be able to ignore these changes altogether. For example, if it realises an investment in June 2002 at a profit it can invest the entire sale proceeds without regard to the restrictions.
