Income Tax Act 2007 section 292AA

Maximum risk finance investments when relevant holding is issued requirement

Section 292AA sets a lifetime cap on the total amount of risk finance investment (through EIS, SEIS, VCT and other qualifying schemes) that a company and its group can receive up to the date the relevant shares are issued.

• The lifetime cap on total relevant investments received by the company (and its group) is £20 million for knowledge-intensive companies or £12 million for all other companies, measured as at the date the relevant shares are issued.
• The cap aggregates not only direct investments in the company itself, but also investments made in any current or former 51% subsidiaries, including investments made before those subsidiaries joined the group.
• Investments in other companies also count towards the cap if the money raised was used for a trade that has since been transferred into the company or its group — and where only part of the money was used for such a trade, only a proportionate amount is included.
• Where a compliance statement later reveals that the cap was breached, the requirement is still treated as having been met for the period from the share issue date until the compliance statement was provided, allowing orderly correction.