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HMRC internal manual

Venture Capital Schemes Manual

HM Revenue & Customs
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CVS: general: employment of money raised


The money raised by the issue of the shares and of any other shares of the same class issued on the same day must be employed, within a certain time (see VCM90140), wholly for the purpose of a trade. But any amount employed for some other purpose is disregarded if it is insignificant.

The trade in question may be carried on either by the company or by a subsidiary. Alternatively the money may be employed for the purpose of research and development (see ITA07/S1006) from which it is intended that a trade, carried on or to be carried on within the same group, will benefit or will be derived.