Income Tax Act 2007 section 317

Power to facilitate disposal to VCT by VCT-in-liquidation

Section 317 provides a regulation-making power to smooth the transfer of shares and securities from a Venture Capital Trust that is being wound up (a VCT-in-liquidation) to another active VCT, so that the acquiring VCT's tax status and qualifying holdings are not disrupted.

• Regulations may deem the acquiring VCT's approval conditions under section 274 to be met (or treated as about to be met) for periods after the acquisition from the VCT-in-liquidation.
• Shares or securities taken on from the VCT-in-liquidation may be treated as qualifying holdings of the acquiring VCT for the purposes of the Chapter 4 requirements.
• New shares issued by the acquiring VCT to members of the VCT-in-liquidation — whether directly or via the liquidating VCT — may be treated as representing the original shares held in the VCT-in-liquidation, preserving the deferred capital gains tax position under Schedule 5C to TCGA 1992.
• The regulations can apply to acquisitions made at any time during the winding up, or only during specific periods of the winding up as the regulations may prescribe.