Income Tax Act 2007 section 292A

The maximum amount raised annually through risk finance investments requirement

Section 292A sets an annual cap on the total amount of risk finance investments that can be received by a company (and its group) in the year ending with the date a VCT's relevant holding is issued, and defines what counts as a relevant investment for this purpose.

• The annual investment cap is £10 million for knowledge-intensive companies and £5 million for all other companies, measured over the year ending on the date the relevant holding is issued.
• The cap applies across the whole group: investments in any 51% subsidiary of the relevant company, investments whose proceeds funded a subsidiary's trade, and investments linked to trades transferred into the group during the year are all counted.
• A "relevant investment" includes any VCT investment, share issues backed by EIS, SEIS or social investment compliance statements, and any other investment constituting state aid approved by the European Commission before IP completion day under the risk finance guidelines.
• If a later compliance statement causes the annual cap to be breached, the requirement is treated as having been met from the time the holding was issued until the compliance statement was provided, so relief is not clawed back retrospectively for that interim period.