Income Tax Act 2007 section 297

The gross assets requirement

Section 297 sets out the maximum gross asset values that a company (or group of companies) must satisfy immediately before and after a share issue in order to meet the venture capital trust qualifying conditions.

• A standalone company must have gross assets of no more than £15 million immediately before the issue of the relevant holding, and no more than £16 million immediately afterwards.
• A parent company must meet the same £15 million (before) and £16 million (after) thresholds, but applied to the aggregate gross assets of the entire group.
• When calculating group assets, any intra-group items — such as rights against, shares in, or securities of another group member — are excluded to avoid double-counting.
• The distinction between a "single company" and a "parent company" determines whether the test is applied at entity level or at group level.