Income Tax Act 2007 section 322

Provision that may be made by regulations under section 321

Section 322 sets out the types of provision that regulations may make to facilitate the merger of two or more venture capital trusts (VCTs), covering VCT status, tax reliefs, qualifying holdings, and information disclosure.

• Regulations may treat the successor company or any merging company as a VCT for specified tax purposes before, during or after the merger, and may deem VCT approval conditions to be met throughout the process.
• Disposals of shares in a merging company made to effect the merger can be exempted from the rule that claws back income tax relief when VCT shares are sold within five years of issue, and can also be excluded from being chargeable events for capital gains tax deferral purposes.
• Shares or securities acquired by the successor company from a merging company can be treated as meeting the qualifying holdings requirements, and the rule allowing withdrawal of VCT approval for repayments of share capital can be disapplied or modified in relation to merger-related payments.
• Regulations may apply specified tax legislation (with or without modifications) to merger-related transactions and may authorise HMRC to disclose information provided by any merging or successor company for tax purposes connected with the merger.