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HMRC internal manual

Capital Gains Manual

Company reconstructions: Company becoming a Venture Capital Trust


TCGA92/S101B applies where a company has acquired assets at no gain/no loss under the provisions of TCGA92/S139 at a time when it was not a Venture Capital Trust, but it later obtains approval as a Venture Capital Trust under ITA2007/S274. The effect of Section 101B is a deemed market value disposal and reacquisition of the assets immediately after the Section 139 transfer. Section 101B produces the same result for Venture Capital Trusts as TCGA92/S101 does for investment trusts. Section 101 is dealt with in CG52820-52823. With certain minor modifications those instructions apply to Venture Capital Trusts as they do to investment trusts. The modifications are

  • any chargeable gain or allowable loss which accrues under Section 101B does so immediately before the time from which the company’s approval under ITA2007/S274 is effective
  • Section 101B does not apply if the company has previously been an investment trust and Section 101(1) has already applied in respect of its acquisition of the asset.