This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Venture Capital Schemes Manual

VCT: VCT qualifying holdings: qualifying subsidiaries requirement


Any subsidiary that the issuing company has must be a qualifying subsidiary of the company.

Meaning of ‘qualifying subsidiary’ - ITA07/S302

A company is a qualifying subsidiary if it is a 51% subsidiary of the relevant company. The meaning of 51% subsidiary is the same as that given in CTA10/S1154. That is, the relevant company must directly or indirectly hold more than 50% of the ordinary share capital.

In addition in order to be a qualifying subsidiary, no other person other than the relevant company, or one of its subsidiaries, must control the subsidiary, and there must be no arrangements by virtue of which that requirement could cease to be met.

‘Control’ for this purpose has the meaning given at ITA07/S995. That is, the power of any person by means of the holding or shares or voting power in any company, or as a result of any powers conferred by a document regulating the company or any other company, that the affairs of the company are conducted in accordance with the person’s wishes.

These conditions are not to be regarded as ceasing to be satisfied by reason only of a winding-up or dissolution of the subsidiary or its parent, or of the subsidiary or its parent going into receivership, or of a disposal of the shares in the subsidiary, provided in all cases that this occurs for genuine commercial reasons and not as part of a scheme or arrangement for the avoidance of tax.