Income Tax Act 2007 section 89

Meaning of a company being "in administration"

Section 89 provides transitional rules for determining when a company is considered to be "in administration" for Venture Capital Trust purposes, covering older administration orders made under earlier insolvency legislation in Northern Ireland, England and Wales, and overseas jurisdictions.

• For Northern Ireland administration orders petitioned before 6 April 2007, and equivalent overseas orders instituted before that date, the definition of "in administration" is broadened to include both the modern Schedule B1 procedure and the older Northern Ireland and overseas order regimes.
• For administration orders under Part 2 of the Insolvency Act 1986 petitioned before 15 September 2003, the definition covers the older-style administration orders in England and Wales, Northern Ireland, and equivalent overseas orders, but does not include the newer Schedule B1 procedure.
• These transitional rules modify the standard definition in section 331, which would otherwise apply only to the modern administration regime introduced by the Enterprise Act 2002.
• The practical effect is that companies subject to older forms of administration order continue to be recognised as "in administration" for VCT purposes, preserving the tax treatment that applied when those orders were originally made.