E3.230 Corporation tax relief for the VCT and approval conditions
Income tax and capital gains tax reliefs for the investor are discussed at E3.201. A VCT is itself exempt from corporation tax on gains in the same way as an investment trust (see D7.339). This is because the capital gains of a VCT are not chargeable gains. Capital losses are not allowable losses for the VCT.1.
In order for the investor to obtain the full investor reliefs without restriction, and for the company to obtain the corporation tax relief, the VCT must be approved as such by HMRC.
Approval as a VCT
A company can seek either full or provisional approval as a VCT. As regards applications for either form of approval, see E3.270.
A notice of approval specifies the date from which it has effect. This cannot be earlier than the date on which the application for approval was made2.
There is some terminology to which many of the conditions imposed upon a VCT refer. The terms
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