Income Tax Act 2007 section 264

No entitlement to relief if there is a linked loan

Section 264 removes an individual's entitlement to VCT relief on shares where a loan connected to the share subscription has been made to the individual or an associate during a specified period.

• VCT relief is denied on shares if a linked loan is made to the individual or an associate at any time during the relevant period.
• A "linked loan" is one that would not have been made, or would not have been made on the same terms, if the individual had not subscribed for the shares or proposed to do so.
• The concept of a loan extends to the giving of credit and the assignment of debts owed by the individual or an associate.
• The relevant period runs from the later of the company's incorporation or two years before the share issue, and ends immediately before the fifth anniversary of the share issue.