Part 6

Venture capital trusts
Chapter 2

VCT relief

Loss of relief

Loss of relief if shares disposed of within 5 years
266
1
This section applies, subject to section 267 (spouses or civil partners), if an individual—
a
obtains VCT relief in respect of eligible shares in a VCT, and
b
makes a disposal of those shares within 5 years of their issue to the individual.
2
In the case of a disposal that is made otherwise than by way of a bargain made at arm's length, any VCT relief obtained by reference to the shares which are disposed of is to be withdrawn.
3
In the case of a disposal that is made by way of a bargain made at arm's length, any VCT relief obtained by reference to the shares disposed of must—
a
if it is greater than A, be reduced by A, and
b
in any other case, be withdrawn.
4
A is 30% of the amount or value of the consideration which the individual receives for the shares.
5
The rules in subsections (6) and (7) are for determining which eligible shares of any class are treated as disposed of for the purposes of—
a
this section, and
b
section 267,
if a person disposes of some but not all of the eligible shares of that class which the person holds in a company.
6
Shares acquired on an earlier day are treated as disposed of before shares acquired on a later day.
7
Shares acquired on the same day are treated as disposed of in the following order—
a
shares by reference to which VCT relief has not been obtained, and
b
shares by reference to which VCT relief has been obtained.