Taxation of Chargeable Gains Act 1992 section 151B

Venture capital trusts: supplementary

Section 151B provides supplementary rules for the capital gains tax treatment of venture capital trust (VCT) shares, including how different categories of VCT shares are identified, how share reorganisations are handled, and what happens when a company's VCT approval is withdrawn.

• VCT shares eligible for CGT relief are excluded from the normal share pooling and identification rules, and must be kept separate from other holdings
• Where a share reorganisation affects VCT shares, different categories of shares (based on their CGT and income tax relief status) must each be treated as a separate holding
• The usual share-for-share exchange and reconstruction relief rules are disapplied where eligible VCT shares are exchanged for shares that are not ordinary shares in a VCT
• If a company's VCT approval is withdrawn (other than in limited circumstances), shareholders are treated as having sold and immediately reacquired their shares at market value, crystallising any gain or loss at that point