What does section 87 of the Income Tax Act 2007 do?

Section 87 establishes a commencement date for the venture capital trust restructuring rules in sections 326 to 329. It ensures those provisions do not apply retrospectively to any restructuring arrangements made, or conversion rights exercised, before 16 June 1999 under United Kingdom law.

Which sections of the Income Tax Act 2007 are affected by the section 87 transitional rule?

Sections 326 to 329 of the Income Tax Act 2007 are affected. These sections deal with VCT restructuring arrangements and the conversion of convertible shares and securities. Section 87 prevents their application to events occurring before 16 June 1999.

What is the significance of 16 June 1999 in relation to VCT restructuring rules?

16 June 1999 is the key commencement date. Any VCT restructuring arrangements entered into, or conversion rights exercised, before that date fall outside sections 326 to 329. Only arrangements or conversions occurring on or after 16 June 1999 are governed by those provisions.

Does section 87 still have practical relevance today?

While current transactions are unlikely to be affected given the date is well in the past, section 87 remains relevant where historic VCT transactions are reviewed or where the tax consequences of long-standing restructuring arrangements or share conversions predating 16 June 1999 are being considered.

Income Tax Act 2007 section 87

Acquisitions for restructuring purposes etc.

Section 87 establishes a commencement date for the venture capital trust restructuring rules in sections 326 to 329, ensuring they do not apply retrospectively to arrangements or conversions before 16 June 1999.

Sections 326 to 329 deal with VCT restructuring arrangements and conversion of convertible shares and securities
These provisions do not apply to any arrangements made before 16 June 1999
They also do not apply where rights of conversion were exercised before that date
Any restructuring activity or share conversion occurring on or after 16 June 1999 falls within the scope of sections 326 to 329

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