Income Tax Act 2007 section 309B

Excluded activities: subsidised generation of heat and subsidised production of gas or fuel

Section 309B excludes the subsidised generation of heat and the subsidised production of gas or fuel from qualifying as eligible activities for the purposes of Venture Capital Trust (VCT) relief.

• Energy generating activities that receive subsidies are treated as excluded activities for VCT purposes, meaning companies carrying on such activities cannot qualify for VCT tax relief.
• This covers the subsidised generation of heat as well as the subsidised production of gas or other fuel, ensuring these activities are not supported through tax-advantaged venture capital investment.
• The exclusion applies to investments made in companies on or after 6 April 2016, aligning VCT rules with equivalent restrictions introduced for the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS).
• The provision was introduced by Finance Act 2014 and subsequently amended by Finance Act 2016 to broaden the scope of excluded energy-related activities across all three venture capital schemes.