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HMRC internal manual

Venture Capital Schemes Manual

VCT: VCT qualifying holdings: requests for advance assurances: overview

A company which has been offered, or is hoping to be offered, funding by a VCT may seek assurances from HMRC that following the issue of a holding to the VCT that holding will be regarded as part of its qualifying holdings. It may also seek an assurance that all or some of the shares to be issued will be eligible shares (see VCM54150). Requests for such assurances should be made to the Small Company Enterprise Centre whose address and contact details are at VCM2070.

The assurance facility allows the company to provide information about its structure and activities as the company intends them to be; and about the proposed investment including how the company intends to use the monies raised. Based on the information provided, HMRC will provide an opinion as to whether the company would meet the conditions to be included as part of a VCT’s qualifying holdings following an issue of shares or securities. This requires HMRC to form a view at the time of an advance assurance application as to whether the conditions of the scheme would be satisfied to the extent they could be satisfied at the point the VCT makes its investment.

Requests can be dealt with only if they come from the company’s secretary or directors or from some person authorised by them to negotiate with HMRC on their behalf. The rules of confidentiality apply, and any other parties making enquiries about a company should address those enquiries to the company itself.

An advance assurance is given in respect of a particular issue of shares and companies should be aware that an assurance given in respect of one share issue should not necessarily be regarded as providing assurance in respect of a different share issue.