The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

• Venture capital trusts
• Introduction
• Conditions to be met by investor
• Conditions to be met in relation to the ‘qualifying holdings’
• Conditions met by the VCT

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Introduction A venture capital trust VCT isa quoted company that invests in shares and securities issued by qualifying unquoted trading companies with a permanent establishment in the UK A subscription in eligible shares of a qualifying VCT isa tax efficient investment for the individual He can benefit from the following tax reliefs income tax relief of up to 30 on the amount invested income tax exemption for dividends from the VCT capital gains tax exemption on any gain on the sale of the VCT shares These reliefs are considered in further detail in the Venture capital trusts income tax relief guidance note The conditions for a valid investment are discussed below VCTs are attractive to investors who want to spread their risk by indirectly investing in a number of unquoted companies rather than investing direct in one company as in the enterprise investment scheme For more on that scheme see the Enterprise investment scheme introduction guidance note Note that a sunset clause for VCT income tax relief has been introduced This ensures that income tax relief will no longer be given to subscriptions made on or after 6 April 2025 unless the legislation isrenewed by Treasury Order ITA 2007 s 261 3 za 5 Qualifying conditions As tax relief isonly available for subscriptions by an individual in eligible shares in a qualifying VCT it isimportant to be clear on the conditions that must be met Conditions to be met by investor To obtain the income tax relief on investment in a VCT the investor must meet all the following conditions be over 18 years old when the shares are issued subscribing for shares on his own behalf although from 17 July 2014 the shares can be held on behalf of the investor by a nominee and the investment must be for genuine commercial reasons and not to avoid tax ITA 2007 ss 261 1 3 330A In relation to shares