A VCT dividend is exempt from income tax in the hands of the recipient provided certain conditions are met.
Definition of a VCT dividend
A VCT dividend is a dividend paid in respect of ordinary shares in a company that is a VCT at the end of the accounting period in which the profit or gains in respect of which it is paid arose or accrued, and is a VCT when the dividend is paid. Additionally it must have been a VCT when the person to whom it is paid acquired the shares1. This means that in effect the dividend must be paid by the VCT whilst it is approved.
If provisional approval is withdrawn, all dividends paid during the period of approval will be treated as if they were never exempt from income tax2.
Conditions for dividend relief
No income tax liability arises in respect of a VCT dividend provided the following conditions are met3:
- Ìý
•ÌýÌýÌýÌý the person beneficially entitled to the dividend
To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to Tolley+™ Research or register for a free trial
Web page updated on 17 Mar 2025 16:16