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HMRC internal manual

Venture Capital Schemes Manual

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HM Revenue & Customs
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Share loss relief: individual and corporate claimants: individual claimants: type of company invested in: qualifying trading company: introduction

ITA07/S134 imposes four ‘high level’ conditions (A - D) each of which must be met at the date of disposal of the shares in order for the company which issued the shares to be a qualifying trading company. Each of these high level conditions has two or more subsidiary requirements some or all of which must be met in order for the high level condition to be met. The following table introduces the high level conditions and their subsidiary requirements and provides links to more detailed guidance.

High level condition A: subsidiary requirements to be met at time of, or prior to, disposal of shares

All four subsidiary requirements must be met.

Subsidiary requirement Statute  
(ITA 2007) Guidance  
     
The trading requirement S137 VCM74610+
The control and independence requirement S139 VCM74900+
The qualifying subsidiaries requirement S140 VCM74920+
The property managing subsidiaries requirement S141 VCM74950+

High level condition B: subsidiary requirements in A also to be met throughout a specified period

Subsidiary requirements are alternative to one another

Subsidiary requirement Statute  
(ITA 2007) Guidance  
     
subsidiary requirements in A to be met for continuous period of six years S134(3)(a) VCM75000
subsidiary requirements in A to be met for less than six years providing previous activities are limited S134(3)(b) VCM75000