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HMRC internal manual

Venture Capital Schemes Manual

VCT: VCT approval: 15% holding limit condition

ITA07/S274(2) and S277

One of the conditions of approval is that no holding in a single company may exceed 15% by value of a VCT’s investments. A ’holding’ is defined as the shares or securities held in any one company, whether those shares or securities are of one class or of more than one class.

For the purposes of this test, a group of companies is treated as if it were a single company.

Where a VCT has a holding representing more than 15% of the value of all its investments, the 15% value test will not be regarded as breached, if

  • at the time of the acquisition of the holding, or
  • at the time of its revaluation following an addition to or payment for that holding,

its value does not exceed 15% of the value of all the VCT’s investments at the time of acquisition or revaluation.

The value of each holding of investments for the purpose of this test is found in accordance with ITA07/S278 see VCM54160.

For the meaning of ‘securities’ see VCM54090.

From 6 April 2007 the term ‘investment’ for the purpose of this test includes cash and other funds held by the VCT or held by a third party on its behalf - see VCM54090.