Income Tax Act 2007 section 280C

The permitted maximum age condition

Section 280C sets out the permitted maximum age condition that must be met when a VCT makes an investment in a company, ensuring that tax-advantaged venture capital funding is directed towards earlier-stage businesses rather than long-established ones.

• A VCT investment breaches the permitted maximum age limits if it is made after the initial investing period (7 years from the first commercial sale, or 10 years for knowledge-intensive companies) and none of three exempting conditions (A, B, or C) is met.
• Condition A allows a later investment if a relevant investment was previously made within the initial investing period and the money raised is used for the same activities as the current investment.
• Condition B allows a later investment if the current investment (together with any other relevant investments in the same 30-day window) amounts to at least 50% of the company's average annual turnover, and the money is used to enter a new product or geographical market.
• Condition C allows a later investment if condition B was previously satisfied for an earlier relevant investment in the same company and the money raised by the current investment is used for the same activities as that earlier investment.

---