Income Tax Act 2007 section 259

Venture capital trusts and VCT approvals

Section 259 defines what a venture capital trust (VCT) is and what VCT approval means for the purposes of the VCT tax relief rules.

• A venture capital trust (VCT) is a company that is not a close company and has been approved by HMRC under the VCT rules.
• A close company is broadly one controlled by five or fewer shareholders or by its directors, so VCTs must have a wider ownership base.
• VCT approval is the formal approval granted by HMRC allowing a company to operate as a venture capital trust; the detailed conditions for approval are set out in Chapter 3.
• The terms "venture capital trust", "VCT", and "VCT approval" as defined here apply throughout Part 6 of the Income Tax Act 2007.