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POLICY CHANGES TIME
1995
04-05
06-07
07-08
09-10
11-12
12-13
Venture Capital Trust scheme introduced to encourage individuals to invest indirectly in a range of
unquoted smaller higher-risk trading companies.
6 April 2004, maximum qualifying for Income Tax relief increased from £100,000 to £200,000. Capital gains
deferral relief not available at this time. The merger of VCTs without the loss of VCT tax reliefs became
effective on 17 September 2004.
From
6 April 2006
, the maximum gross assets of qualifying holdings decreased from £15 million to £7
million before investment and from £16 million to £8m immediately after investment. The rate of Income
Tax relief reduced to 30% from 40%. The 40% rate had been introduced for a two year period starting on
6 April 2004; prior to that Income Tax relief was given at 20%. The holding period for shares held by VCTs
increased from three to five years.
From
6 April 2007
, VCT qualifying holdings are limited to companies with fewer than 50 full time equivalent
employees at the time shares are issued. From 19 July 2007, companies must have raised no more than £2
million in any 12 month period under any or all of the tax-based Venture Capital Schemes.
Money raised should be wholly employed within two years of the issue of the relevant holding or, if the
issue takes place before commencement of the intended trade, within two years of commencement.
The requirement that the trade be carried on wholly or mainly in the UK was removed, and replaced with
a requirement that the issuing company have a permanent establishment in the UK. Restriction that
prevented a VCT investing more than £1m per annum in any single company removed (unless the company
is a member of a partnership or joint venture that carries on the qualifying trade).
From 6 April 2012, VCT qualifying holdings are extended to companies with fewer than 250 full time
equivalent employees and gross assets of no more than £15 million before investment and £16 million after
investment. The annual investment limit for companies is increased to £5 million, and that sum must take
account of EIS and SEIS investment and any other investment received via any measure covered by the
European Commission’s Guidelines on State Aid to promote Risk Capital Investment in Small and Medium-
sized Enterprises. For investments made by the VCT out of funds raised by it on or after 6 April 2012, an
investee company using the funds to acquire shares in another company will not be regarded as using them
for a qualifying purpose.