An investor is exempt from capital gains tax on a qualifying disposal of ordinary shares in a company which is a VCT from the time of acquisition until the time of disposal. A loss on such a disposal is not an allowable loss1.
| Term | Definition |
| Ordinary shares | Ordinary shares are any shares forming part of the company's ordinary share capital. Ordinary share capital has the meaning given in ITA 2007, s 9892. |
| Qualifying disposal | A qualifying disposal is one made by an individual aged 18 or over, where the shares were acquired within the permitted maximum for the year in which they were acquired (see below), and where the individual acquired the shares for bona fide commercial purposes and not as part of a tax avoidance scheme3.
HMRC states that this restriction is only likely to apply in exceptional circumstances, such as where artificial arrangements are made to convert shares which do not qualify for exemption into shares which do qualify4. |
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