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HMRC internal manual

Venture Capital Schemes Manual

VCT: VCT qualifying holdings: meaning of ‘connected’

ITA07/S993 & S1021

In ascertaining, for the purpose of applying the ‘control’ rule, whether a person is connected with a company ITA07/S993 should be applied. Guidance on this provision is given at CG14580 onwards, which deals with similarly worded legislation. In applying S993, which makes extensive use of the concept of control, the modification of CTA10/S450 and S451 referred to at VCM55210 should be made.

Most of the circumstances in which S993 provides for persons to be treated as connected with each other are predictable. The exception is that covered in S993(7), which provides that persons are to be regarded as connected in relation to a company if they act together to secure or exercise control of that company. The provision extends to persons acting on the direction of any of those persons. Guidance can be found at CG14622.