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HMRC internal manual

Venture Capital Schemes Manual

From
HM Revenue & Customs
Updated
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VCT: VCT returns: identifying investments funding by different issues of shares: interaction of protected money and further issue

Interaction of ‘protected money’ and ‘further issues’ funds

An investment acquired with funds from a further issue will be disregarded for three years for the purposes of 70% qualifying holdings condition and the 30% or 70% eligible shares condition. Since the investment will not enter the 70% qualifying holdings condition and the 30% or 70% eligible shares condition computations its status as protected money will not be directly relevant during this time.

If the further issue was made at a time when the funds were also protected money in relation to a relevant change, the investment will be treated as made out of protected money once the further share issue period has come to an end.

It is not possible for a VCT to treat an investment as purchased out of a particular share issue for the purpose of the protected money rules, but treat it as purchased out of a different share issue for the purpose of applying the further share issue rules.