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HMRC internal manual

Venture Capital Schemes Manual

CVS: investors and reliefs: reduction or withdrawal of relief


There are various circumstances in which, if they occur before the end of the qualification period (see VCM50350), it may be necessary to reduce the relief obtained or to withdraw it completely. They fall into six categories:

  1. it transpires that the issuing company is not a qualifying issuing company or the shares are not eligible shares (these matters are dealt with by Inspectors at the Small Company Enterprise Centre - see VCM91040 - who will notify you as necessary),
  2. it transpires that the investing company is not a qualifying investing company (see VCM91050 onwards),
  3. the investing company disposes of the shares (see VCM91260),
  4. the investing company receives value from the issuing company (see VCM91300 onwards),
  5. the issuing company repays share capital owned by another shareholder (see VCM91360 onwards),
  6. an option is granted over the shares (see VCM91290).

The withdrawal of investment relief may trigger the withdrawal of any deferral relief given.

For the method of withdrawing investment relief, see VCM91370.