Part 6

Venture capital trusts
Chapter 2

VCT relief

Loss of relief

Transfers of shares between spouses or civil partners
267
1
Section 266 does not apply in the case of any disposal of shares made by an individual to the individual's spouse or civil partner, if it is made at a time when they are living together.
2
Subsection (3) applies if any eligible shares which—
a
have been issued to any individual (“the transferor”), and
b
are shares by reference to which any VCT relief has been obtained,
are transferred to the transferor's spouse or civil partner (“the transferee”) by a disposal such as is mentioned in subsection (1).
3
If this subsection applies, section 266 and subsection (2) have effect, in relation to any subsequent disposal or other event, as if—
a
the transferee were the person who had subscribed for the shares,
b
the shares had been issued to the transferee at the time when they were issued to the transferor,
c
there had been, in relation to the transferred shares, such a reduction by way of VCT relief in the transferee's liability to income tax as is equal to the actual reduction in respect of those shares of the transferor's liability, and
d
that deemed reduction were (despite the transfer) to be treated for the purposes of section 266 as an amount of VCT relief obtained by reference to the shares transferred.
4
Any assessment for withdrawing or reducing VCT relief because of a disposal or other event falling within subsection (3) is to be made on the transferee.