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HMRC internal manual

Venture Capital Schemes Manual

VCT: investor CG deferral relief: how was the relief given?


The relief was given by deferring the date on which the chargeable gain was treated as accruing. There was no requirement that the proceeds of the disposal were actually invested in the subscription for the new shares. The gain was matched against the expenditure on a pound for pound basis. The relief had to be claimed.


In the tax year 1996-97 an investor has the following transactions:

  • May 1996 disposes of a property incurring an agreed chargeable gain of £84,000.
  • September 1996 subscribes for and is issued £60,000 worth of shares in a VCT. The investor receives ‘front-end’ income tax relief on the investment.

The investor can make a claim for up to £60,000 of the £84,000 gain to be deferred.