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HMRC internal manual

Venture Capital Schemes Manual

From
HM Revenue & Customs
Updated
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CVS: general: employment of money raised: time limits

FA00/SCH15/PARA36

The time within which the money raised by the issue of the shares must be employed is as follows:

For shares issued on or after 22 April 2009

  • If it is employed for a trade or for research and development which is being carried on at the time when the shares are issued, all of the money must be employed within two years of the date of issue.
  • If, when the shares are issued, the company is preparing to carry on a trade, all of the money must be employed within 2 years of the date of commencement of that trade.

For shares issued before 22 April 2009

  • If it is employed for a trade, or for research and development, which is being carried on at the time when the shares are issued, or for research and development which begins to be carried on immediately afterwards, at least 80% must be employed within twelve months after the date of issue. Any money remaining must be employed within the following 12 months.
  • If, when the shares are issued, the company is preparing to carry on a trade, at least 80% must be employed within twelve months after the commencement of that trade. Any money remaining must be employed within the following 12 months.

If the money is to be employed for a trade, which at the date of the issue is not yet being carried on by a group company, it must in any event be employed within three years after the date of issue of the shares.