Income Tax Act 2007 section 293

The use of the money raised requirement

Section 293 sets out the requirements governing how and when money raised through the issue of shares held by a venture capital trust must be employed for qualifying purposes.

• The requirement is met either if less than two years have passed since the trading time, or if two or more years have passed and all the money raised has been wholly employed for a relevant qualifying activity
• Money spent on acquiring interests in other companies, subsidiaries, trades, intangible assets or goodwill used in a trade does not count as being employed for a relevant qualifying activity
• Using money to acquire shares in a company does not in itself count as employing the money for a relevant qualifying activity
• Money is not treated as employed for non-qualifying purposes if the only amount used outside the qualifying activity is insignificant