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HMRC internal manual

Capital Gains Manual

Venture Capital Trusts: transfer of assets to company

TCGA92/S101CTCGA92/S101C applies where there has been an intra-group transfer of an asset at no gain/no loss under TCGA92/S171(1) to a company which, although not a Venture Capital Trust at the time of the transfer, later becomes one. Section 101C parallels for Venture Capital Trusts the provisions in Section 101A TCGA 1992 for companies which later become investment trusts following an intra-group transfer, see CTM47000 onwards.

Groups of companies could exploit the exemption for the chargeable gains of Venture Capital Trusts by transferring assets at no gain/no loss to a company at a time when the company was not a Venture Capital Trust and later converting the company to a Venture Capital Trust before it disposed of the assets. Section 101C was introduced into TCGA 1992 by Section 135 FA 1998 to counter this type of avoidance. Section 101C applies to a company which obtained approval as a Venture Capital Trust from a time on or after 17 March 1998.