Regulations enable investors in VCTs to retain their tax reliefs when the VCT in which they have invested is wound up, provided that the winding up is for genuine commercial reasons and not part of a scheme or arrangement the main purpose, or one of the main purposes of which, is the avoidance of tax1.
In addition, a VCT which is being wound up has a grace period called the prescribed winding up period, during which certain tax exemptions continue to apply2.
| Terminology | Definition |
| The prescribed winding up period | This is defined such that in most cases it will be the three years beginning at the commencement of the winding up3. |
| VCT in liquidation | A VCT in liquidation is a company that is being wound up and that immediately before the winding up, was a VCT4. |
Scope of regulations
The regulations apply to a VCT in liquidation whose VCT approval has had effect for the continuous period of three years immediately preceding
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Web page updated on 17 Mar 2025 14:46