|
| |
|
| |
281 | Withdrawal of VCT approval of a company |
| |
(1) | The Commissioners for Her Majesty’s Revenue and Customs (“the |
| |
Commissioners”) may withdraw the VCT approval of a company if at any time |
| |
it appears to them that there are reasonable grounds for believing— |
| 5 |
(a) | that the conditions for the approval of the company were not met at the |
| |
| |
(b) | in a case where the Commissioners were satisfied for the purposes of |
| |
section 274(1)(b) or 275(2) that any of the conditions mentioned in |
| |
section 274(2) would be met in relation to any period, that the condition |
| 10 |
is one which will not be, or has not been, met in relation to that period, |
| |
(c) | in the case of a company approved under subsection (2) of section 275 |
| |
(read with paragraph (b) of subsection (3) of that section), that the |
| |
company has not met such other conditions as may be prescribed by |
| |
regulations made by the Commissioners in relation to— |
| 15 |
(i) | the period of 3 years mentioned in that paragraph, or |
| |
(ii) | any part of that period, |
| |
(d) | in a case where the use of any money falls to be ignored for any |
| |
accounting period in accordance with section 280(2), that— |
| |
(i) | the first accounting period of the company for which the use of |
| 20 |
that money will not be ignored will be a period in relation to |
| |
which any of the conditions mentioned in section 274(2) will fail |
| |
| |
(ii) | the company has not met such other conditions as may be |
| |
prescribed by regulations made by the Commissioners in |
| 25 |
relation to, or to any part of, an accounting period for which the |
| |
use of that money falls to be ignored, or |
| |
| |
(i) | the company’s most recent complete accounting period or its |
| |
current one is a period in relation to which there has been or will |
| 30 |
be a failure of any of the conditions mentioned in section 274(2) |
| |
| |
(ii) | the failure was not or will not be one which, at the time of the |
| |
approval, was allowed for in relation to that period by virtue of |
| |
| 35 |
(2) | Subject to subsections (3) and (4), the withdrawal of the approval of a company |
| |
for the purposes of this Part has effect as from the time when notice of the |
| |
withdrawal is given to the company. |
| |
(3) | If, in the case of a company approved as a VCT in the exercise of the power |
| |
conferred by section 275(2), the approval is withdrawn at a time before all of |
| 40 |
the conditions mentioned in section 274(2) have been met with respect to the |
| |
| |
(a) | in relation to a complete accounting period of 12 months, or |
| |
(b) | in relation to successive complete accounting periods constituting a |
| |
continuous period of at least 12 months, |
| 45 |
| the withdrawal of the approval has the effect that the approval is for all |
| |
purposes treated as never having been given. |
| |
(4) | A notice withdrawing the approval of a company for the purposes of this Part |
| |
may specify a time falling before the time mentioned in subsection (2) as the |
| |
|
| |
|
| |
|
time from which the withdrawal is to be treated as having effect for the |
| |
purposes of section 100 of TCGA 1992 (exemption for venture capital trusts |
| |
| |
| But the time so specified must be no earlier than the beginning of the |
| |
accounting period in relation to which it appears to the Commissioners that the |
| 5 |
condition by reference to which the approval is withdrawn has not been, or |
| |
| |
(5) | Despite any limitation on the time for making assessments, an assessment to |
| |
any tax chargeable in consequence of the withdrawal of any VCT approval |
| |
may be made at any time before the end of the period of 3 years beginning with |
| 10 |
the time when the notice of withdrawal is given. |
| |
282 | Withdrawal of VCT approval in cases for which provision made under section |
| |
| |
(1) | The Treasury may by regulations make provision for withdrawal of VCT |
| |
approval of a company to be treated— |
| 15 |
(a) | in a case where the withdrawal is by reference to a condition for |
| |
approval that would have been, or would be, met but for provision |
| |
made under section 280(3), and |
| |
(b) | for the purposes of enactments specified by regulations, |
| |
| as having taken effect as from a time specified in the notice of withdrawal that |
| 20 |
is earlier than the time when the notice is given to the company. |
| |
(2) | Provision made under subsection (1) has effect subject to the provisions of |
| |
section 281(4) (retrospective effect of notices of withdrawal of VCT approval) |
| |
as to the earliest time that may be specified by such a notice. |
| |
(3) | Section 324 applies in relation to— |
| 25 |
(a) | regulations under subsection (1), and |
| |
(b) | any power conferred by that subsection, |
| |
| as it applies in relation to regulations under Chapter 5 and a power conferred |
| |
by any provision of that Chapter. |
| |
| 30 |
283 | Time as from which VCT approval has effect |
| |
(1) | A VCT approval has effect as from the time specified in the approval. |
| |
(2) | That time, if it falls before the time when the VCT approval is given, must be |
| |
no earlier than the time when the application was made. |
| |
(3) | If the Commissioners for Her Majesty’s Revenue and Customs give a VCT |
| 35 |
approval, they may stipulate that the approval is to have effect as from the time |
| |
when the application for the approval was made or any subsequent time. |
| |
284 | Power to make regulations as to procedure |
| |
Regulations under section 272 may make provision— |
| |
(a) | as to the making of applications for VCT approvals and otherwise as to |
| 40 |
the procedure to be followed in relation to any such applications and |
| |
the giving of such approvals, |
| |
|
| |
|
| |
|
(b) | as to the procedure to be followed in connection with the withdrawal |
| |
| |
(c) | as to the obligations of a company which is a VCT if it should appear to |
| |
the company that the conditions for its VCT approval to continue in |
| |
| 5 |
(d) | as to the accounts, records, returns and other information to be kept, |
| |
and provided or otherwise made available to the Commissioners for |
| |
Her Majesty’s Revenue and Customs, by companies which are or have |
| |
been VCTs and by persons who hold or have held shares in such |
| |
| 10 |
(e) | as to the persons liable to account for any tax becoming due where a |
| |
VCT approval is withdrawn. |
| |
285 | Interpretation of Chapter |
| |
(1) | Chapter 4 has effect for interpreting references in this Chapter to a “qualifying |
| |
| 15 |
(2) | In this Chapter and the following Chapters of this Part “securities”, in relation |
| |
to a company, includes any liability of the company in respect of a loan |
| |
(whether secured or not), except that it does not include— |
| |
(a) | any liability of the company in respect of a loan which has been made |
| |
to the company on terms which allow any person to require— |
| 20 |
(i) | the loan to be repaid, or |
| |
(ii) | any stock or security relating to the loan to be re-purchased or |
| |
| |
| within the period of 5 years from the making of the loan or, as the case |
| |
may be, the issue of the stock or security, or |
| 25 |
(b) | any stock or security relating to a loan which has been made to the |
| |
company on terms which allow any person to require the loan to be |
| |
repaid, or the stock or security to be re-purchased or redeemed, within |
| |
| |
| But see sections 317(4) and 328(2). |
| 30 |
(3) | In this Chapter “eligible shares”, in relation to a company, means ordinary |
| |
shares in the company which carry— |
| |
(a) | no present or future preferential right to dividends or to the company’s |
| |
assets on its winding up, and |
| |
(b) | no present or future right to be redeemed. |
| 35 |
(4) | Any reference in this Chapter to a company’s investments is taken to include, |
| |
so far as it would not otherwise do so— |
| |
(a) | money in the company’s possession, and |
| |
(b) | any sum owed to the company by another person if the company has |
| |
account-holder’s rights over that sum. |
| 40 |
(5) | For the purposes of subsection (4)(b) a company has “account-holder’s rights” |
| |
over a sum owed to the company if— |
| |
(a) | the company has a right (whether or not the exercise of the right is |
| |
subject to conditions) to require the other person to pay out the sum, or |
| |
amounts out of the sum, to the company or at the company’s direction, |
| 45 |
| |
(b) | the sum is owed to the company— |
| |
|
| |
|
| |
|
(i) | as a result of amounts having been paid to the other person by |
| |
| |
(ii) | as a result of the other person having identified a sum in respect |
| |
of which the company may exercise such a right. |
| |
(6) | Subsection (5) does not have effect to cause a company’s investments to be |
| 5 |
taken to include anything to which the company is not beneficially entitled, but |
| |
for this purpose a company is taken to be beneficially entitled to— |
| |
(a) | sums subscribed for shares issued by it, and |
| |
(b) | anything to which it is entitled that (directly or indirectly) represents |
| |
| 10 |
| |
| |
| |
286 | Qualifying holdings: introduction |
| |
(1) | If any shares in or securities of any company (“the relevant company”) are at |
| 15 |
any time held by another company (“the investing company”), this Chapter |
| |
applies for determining whether and to what extent those shares or securities |
| |
(“the relevant holding”) are, for the purposes of Chapter 3, to be regarded as at |
| |
that time comprised in the investing company’s qualifying holdings. |
| |
(2) | The relevant holding is to be regarded as comprised in the investing |
| 20 |
company’s qualifying holding at any time if— |
| |
(a) | all the following requirements of this Chapter are met at that time in |
| |
relation to the relevant company and the relevant holding, and |
| |
(b) | the relevant holding consists of shares or securities which were first |
| |
issued by the relevant company to the investing company and have |
| 25 |
been held by the investing company ever since. |
| |
(3) | The requirements are those imposed as to— |
| |
(a) | maximum qualifying investment (see section 287), |
| |
(b) | no guaranteed loan (see section 288), |
| |
(c) | proportion of eligible shares (see section 289), |
| 30 |
(d) | trading (see section 290), |
| |
(e) | the carrying on of a qualifying activity (see section 291), |
| |
(f) | use of the money raised (see section 293), |
| |
(g) | the relevant company carrying on the relevant qualifying activity (see |
| |
| 35 |
(h) | unquoted status (see section 295), |
| |
(i) | control and independence (see section 296), |
| |
(j) | gross assets (see section 297), |
| |
(k) | qualifying subsidiaries (see section 298), and |
| |
(l) | property managing subsidiaries (see section 299). |
| 40 |
(4) | Subject to section 293(7), subsection (5) applies if— |
| |
(a) | the requirements of section 287, 293 or 294 would be met as to only part |
| |
of the money raised by the issue of the relevant holding, and |
| |
|
| |
|
| |
|
(b) | that holding is not otherwise capable of being treated as comprising |
| |
| |
(5) | If this subsection applies, this Chapter has effect in relation to the relevant |
| |
holding as if it were two separate holdings consisting of— |
| |
(a) | a holding from which the part of the money mentioned in subsection |
| 5 |
| |
(b) | a holding from which the remainder was raised. |
| |
| Chapter 3 has effect as if the value of the relevant holding were to be |
| |
apportioned between the two holdings treated as subsisting by this subsection. |
| |
| 10 |
287 | The maximum qualifying investment requirement |
| |
(1) | The requirement of this section is that the relevant holding did not, when it was |
| |
issued, represent an investment in excess of the maximum qualifying |
| |
investment for the relevant period. |
| |
(2) | Subject to subsection (7), the maximum qualifying investment for any period is |
| 15 |
exceeded so far as the total amount of money which— |
| |
(a) | is raised in that period, and |
| |
(b) | is so raised by the issue to the investing company during that period of |
| |
shares in or securities of the relevant company, |
| |
| 20 |
(3) | If the relevant holding represented, when issued, an investment in excess of the |
| |
maximum qualifying investment for the relevant period— |
| |
(a) | the shares or securities which represented the excess are not to be |
| |
regarded as part of the relevant holding, and |
| |
(b) | the amount of money raised by those shares or securities is to be |
| 25 |
ignored for the purposes of any subsequent application of subsection |
| |
| |
(4) | For the purposes of this section, if there is any question as to whether any |
| |
shares in or securities of the relevant company which are for the time being |
| |
held by the investing company represent an investment in excess of the |
| 30 |
maximum qualifying investment for any period, that question is determined |
| |
on the following assumption in relation to disposals by the investing company. |
| |
(5) | The assumption is that, as between shares or securities of the same description, |
| |
those which represent the whole or any part of the excess are disposed of |
| |
before those which do not. |
| 35 |
(6) | Subsection (7) applies if— |
| |
(a) | at the time of the issue of the relevant holding the relevant company or |
| |
any of its qualifying subsidiaries was a member of a partnership or a |
| |
party to a joint venture, |
| |
(b) | the trade which meets the requirement of section 291 was at that time |
| 40 |
being carried on, or to be carried on, by those partners in partnership or |
| |
by the parties to the joint venture, and |
| |
(c) | the other partners or parties to the joint venture include at least one |
| |
| |
|
| |
|
| |
|
(7) | If this subsection applies, this section has effect in relation to the relevant |
| |
company as if the sum of money for the time being specified in subsection (2) |
| |
were to be divided by the number of companies (including the relevant |
| |
company) which, at the time when the relevant holding was issued, were |
| |
members of the partnership or, as the case may be, parties to the joint venture. |
| 5 |
(8) | For the purposes of this section “the relevant period” is the period beginning |
| |
with whichever is the earlier of— |
| |
(a) | the time 6 months before the issue of the relevant holding, and |
| |
(b) | the beginning of the tax year in which the issue of that holding took |
| |
| 10 |
| and (in either case) ending with the issue of that holding. |
| |
288 | The no guaranteed loan requirement |
| |
(1) | The requirement of this section is that there are no securities relating to a |
| |
guaranteed loan in the relevant holding. |
| |
(2) | For the purposes of this section, a security relates to a guaranteed loan if (and |
| 15 |
only if) there are arrangements for the investing company to be or to become |
| |
entitled to receive anything (whether directly or indirectly) from a third party |
| |
in the event of the failure by any person to comply with— |
| |
(a) | the terms of the loan to which the security relates, or |
| |
(b) | the terms of the security. |
| 20 |
(3) | For the purposes of subsection (2) it does not matter whether the arrangements |
| |
apply in all cases of a failure to comply or only in some such cases. |
| |
(4) | For the purposes of this section “third party” means any person except— |
| |
(a) | the relevant company, and |
| |
(b) | if the relevant company is a parent company that meets the trading |
| 25 |
requirement in section 290(1)(b), the subsidiaries of that company. |
| |
289 | The proportion of eligible shares requirement |
| |
(1) | The requirement of this section is that eligible shares represent at least 10% by |
| |
value of the totality of the shares in or securities of the relevant company |
| |
(including the relevant holding) which are held by the investing company. |
| 30 |
(2) | For the purposes of this section the value at any time of any shares in or |
| |
securities of a company is taken (subject to subsection (4)) to be their value |
| |
| |
(a) | any relevant event occurring at that time, or |
| |
(b) | if no relevant event occurs at that time, the last relevant event to occur |
| 35 |
| |
(3) | In subsection (2) “the relevant event”, in relation to any shares in or securities |
| |
of the relevant company, means— |
| |
(a) | the acquisition by the investing company of those shares or securities, |
| |
(b) | the acquisition by the investing company of any other shares in or |
| 40 |
securities of the relevant company which— |
| |
(i) | are of the same description as those shares or securities, and |
| |
(ii) | are acquired by the investing company otherwise than by being |
| |
allotted to the investing company without its being liable to |
| |
give any consideration, or |
| 45 |
|
| |
|
| |
|
(c) | the making of any such payment in discharge, in whole or in part, of |
| |
any obligation attached to any shares in or securities of the relevant |
| |
company held by the investing company as (by discharging that |
| |
obligation) increases the value of any such shares or securities. |
| |
(4) | If at any time the value of any shares or securities held by the investing |
| 5 |
company is less than the consideration given by the investing company for |
| |
those shares or securities, it is to be assumed for the purposes of this section |
| |
that the value of the shares or securities at that time is equal to the amount of |
| |
| |
(5) | In this section “eligible shares” has the same meaning as in Chapter 3 (see |
| 10 |
| |
290 | The trading requirement |
| |
(1) | The requirement of this section is that— |
| |
(a) | the relevant company, ignoring any incidental purposes, exists wholly |
| |
for the purpose of carrying on one or more qualifying trades, or |
| 15 |
(b) | the relevant company is a parent company and the business of the |
| |
group does not consist wholly or as to a substantial part in the carrying |
| |
on of non-qualifying activities. |
| |
(2) | If the relevant company intends that one or more other companies should |
| |
become its qualifying subsidiaries with a view to their carrying on one or more |
| 20 |
| |
(a) | the relevant company is treated as a parent company for the purposes |
| |
of subsection (1)(b), and |
| |
(b) | the reference in subsection (1)(b) to the group includes the relevant |
| |
company and any existing or future company that will be its qualifying |
| 25 |
subsidiary after the intention in question is carried into effect. |
| |
| This subsection does not apply at any time after the abandonment of that |
| |
| |
(3) | For the purposes of subsection (1)(b) the business of the group means what |
| |
would be the business of the group if the activities of the group companies |
| 30 |
taken together were regarded as one business. |
| |
(4) | For the purpose of determining the business of a group, activities are ignored |
| |
so far as they are carried on by a mainly trading subsidiary otherwise than for |
| |
| |
(5) | For the purpose of determining the business of a group, activities of a group |
| 35 |
company are ignored so far as they consist in— |
| |
(a) | the holding of shares in or securities of a qualifying subsidiary of the |
| |
| |
(b) | the making of loans to another group company, or |
| |
(c) | the holding and managing of property used by a group company for |
| 40 |
the purpose of one or more qualifying trades carried on by a group |
| |
| |
(d) | the holding and managing of property used by a group company for |
| |
the purpose of research and development from which it is intended— |
| |
(i) | that a qualifying trade to be carried on by a group company will |
| 45 |
| |
|
| |
|