Income Tax Act 2007 section 265

No entitlement to relief which would have been lost if it had already been obtained

Section 265 prevents an individual from claiming VCT relief on shares where circumstances have already arisen that would have caused the relief to be withdrawn or reduced had it previously been obtained.

• An individual cannot claim VCT relief on shares if events have occurred that would trigger withdrawal or reduction of that relief
• The test is whether, hypothetically, the relief would have been lost had it already been in place
• This acts as a safeguard to prevent relief being claimed on shares that no longer meet the qualifying conditions
• The provision applies regardless of the specific reason for the withdrawal or reduction