VCM62152 - Venture capital trust (VCT) scheme: Qualifying holdings: Employment of money raised - second period

ITA/S293

During the “second period” (see VCM62150) the requirement to be satisfied in relation to the money raised is that by the end of the “initial period” the company, or a subsidiary, should have employed at least 80% of it for the purpose of the trade and should intend to employ any money remaining for that purpose.

If less than 80% had been employed at that time, ITA/S286(5) will divide the holding into two. For example, if a company raised £200,000 and by that time had employed only £80,000 the maximum amount that satisfies the rule would be £100,000 (since 80% of that is £80,000) and the holding will be divided accordingly.

See VCM12080 regarding the meaning of “employed” and the identification of the money employed.