VCM58020 - Venture Capital Trusts: VCT returns: details in the return

SI1995/1979 Regulation 22

For each accounting period, or part of accounting period, for which the company was approved as a VCT, the return must provide the following details:

  • the value (see VCM54160) of each investment held at the beginning of the period;
  • the dates and valuations of any new investments made in the period together with revaluation if appropriate (see VCM58030 for investments funded by a further issue of shares by a VCT);
  • where investments are disposed of the names and addresses of the companies concerned together with the dates of disposal and the value of the remainder of the holding if it was not disposed of entirely;
  • in respect of each investment whether it is a qualifying holding (see VCM58040 for investments funded out of protected money);
  • in respect of each qualifying holding, the name and address of the company invested in;
  • the name, address and Financial Services Register reference number of each fund manager, and;
  • for every new investment made:
    • the value of the company’s gross assets immediately before the investment was made
    • the total amount of relevant investments in the company immediately before the investment was made
    • a description of each qualifying activity, for which the money raised was intended to be used, whether carried on by the relevant company or its subsidiaries
    • the number of full time equivalent employees of the company or group immediately before the investment was made
    • whether an advance assurance had been sought for the investment and, if so, whether HMRC approved the application or not, and the date of HMRC’s response
    • whether the company was relying upon condition A, condition B or condition C of ITA07/S280C (VCM8151), and the date of the relevant first commercial sale
    • where a company relies upon meeting higher thresholds than the normal rules because it is a knowledge-intensive company, which of those higher thresholds applies.

The return must be authorised by the secretary or a director of the VCT who must make a note to:

  • certify that the VCT met the conditions for approval (VCM54020 for full approval or VCM54030 for provisional approval) throughout the period or has ceased to be approved; and
  • declare that the return is, to the best of the VCT’s knowledge and belief, true and correct.

The note should be signed and dated and the VCT should retain the note and a copy of the authorised return as part of its company records.

Penalties may be charged under TMA70/S98 for failure to make a return or for making an incorrect return.

SI1995/1979 Regulation 22

Certain rules that have been superseded between 1998 and 2008 continue to apply to VCTs up to and including 5 April 2018 where investments are made out of funds raised, or derived from funds raised, before the particular rule was changed. These rules are often referred to as “grandfathered provisions” (see VCM54140 and VCM55020).

Further information must be supplied on the return for all accounting periods that include dates up to and including 5 April 2018.

If the VCT did not rely upon any of the grandfathered provisions to meet the conditions for approval, and will not in future (up to 5 April 2018) depend upon any of those provisions it must make a declaration that it has not and will not apply those grandfathered provisions.

Where a VCT relies upon one or more grandfathered provisions for one or more relevant investments to be included as a qualifying holding, or intends to do so in future (for example, by maintaining a record of separate pools of investments and monies held that derive from funds raised before a certain date), the VCT must provide the following information:

  • the date or dates the money which was used to acquire the investment was raised; this includes investments acquired using “derived money”, that is money that derives from previous investments acquired using funds raised before a particular date, or deriving from such investments,
  • the name and address of the company in which the investment was made, and
  • the value of the investment at the end of the accounting period, where it was held at that date.

No information is required in relation to Regulation 22A for accounting periods starting on or after 6 April 2018.