Income Tax Act 2007 section 809VC

Qualifying investments

Section 809VC defines what counts as a qualifying investment for the purposes of the Business Investment Relief rules, covering the types of investment, the conditions that must be met, and how drawdown loan arrangements are treated.

• An investment is made when a person acquires or is issued shares (including securities) in a company, or makes a secured or unsecured loan to that company — the company is called the "target company" and the shares or loan rights are called "the holding"
• The investment counts as a "qualifying investment" only if it is made before 6 April 2028, none of the money or property used is TRF capital, and both Condition A and Condition B (defined elsewhere in the legislation) are satisfied at the time the investment is made
• Where a loan agreement allows a company to draw down amounts over time, the agreement itself is not treated as making a loan — instead, each drawdown is treated as a separate loan and therefore a separate investment
• For each drawdown, the investor's rights under the loan relate only to the specific amount drawn down on that occasion, not to the loan facility as a whole