Income Tax Act 2007 section 74

The use of the money raised requirement

Section 74 of Schedule 2 sets out how the "use of the money raised" requirement applies when determining whether shares or securities form part of a venture capital trust's qualifying holdings, specifically for shares issued before 17 March 2004.

• This section applies the rules from section 293 (the use of the money raised requirement) to shares or securities issued before 17 March 2004, but with specific modifications.
• The money raised by issuing the shares or securities must be money that the qualifying company has actually employed or intends to employ for qualifying purposes — a slightly different wording from the standard section 293 test.
• A further modification narrows the reference from "a qualifying company" to "the qualifying company", meaning the funds must be used by the specific company that issued the shares or securities, rather than by any qualifying company more broadly.
• These adjustments ensure that for pre-17 March 2004 share issues, the use of money raised is assessed with tighter, company-specific language while still following the general framework of section 293.