Part 6

Venture capital trusts
Chapter 4

Qualifying holdings

The requirements

The no guaranteed loan requirement
288
1
The requirement of this section is that there are no securities relating to a guaranteed loan in the relevant holding.
2
For the purposes of this section, a security relates to a guaranteed loan if (and only if) there are arrangements for the investing company to be or to become entitled to receive anything (whether directly or indirectly) from a third party in the event of the failure by any person to comply with—
a
the terms of the loan to which the security relates, or
b
the terms of the security.
3
For the purposes of subsection (2) it does not matter whether the arrangements apply in all cases of a failure to comply or only in some such cases.
4
For the purposes of this section “third party” means any person except—
a
the relevant company, and
b
if the relevant company is a parent company that meets the trading requirement in section 290(1)(b), the subsidiaries of that company.