Income Tax Act 2007 section 261

Eligibility for relief

Section 261 sets out the conditions an individual must meet to be eligible for Venture Capital Trust (VCT) income tax relief, the amount on which relief is available, and the circumstances in which eligibility is denied.

• An individual is eligible for VCT relief where a VCT issues eligible shares to them in the tax year for the purpose of raising money, and the individual subscribes for the shares on their own behalf.
• The amount eligible for relief is the amount the individual actually subscribes for the shares, and the shares must be issued before 6 April 2035, for genuine commercial reasons, and not as part of a tax avoidance scheme.
• The individual must be at least 18 years old at the time the shares are issued, and shares treated as issued under section 195(8) of Finance Act 2003 (a company purchasing its own shares) do not qualify for VCT relief.
• The Treasury has the power to change the 6 April 2035 sunset date by regulations.