VCM55130 | VCT: VCT qualifying holdings: amount raised through risk finance investments requirement: overview

ITA07/S280B, 292A, 292AA and 292AB

Companies issuing shares or securities to a VCT are subject to investment limits, both in any 12-month rolling period and throughout the company’s lifetime.

Finance Act 2026 raises the annual and lifetime limits on relevant investments for most companies. The existing limits will continue to apply to the specified companies (see definition below).

ITA07/S292A applies a limit on the amount of relevant investments that may be made in the relevant company within a 12-month rolling period (the annual investment limit). See VCM55131 for more details on the annual limit.

ITA07/S292AA applies a limit on the amount of relevant investment that may be made in the relevant company in its lifetime (the lifetime limit). ITA07/S292AB are anti-abuse provisions to prevent companies from sidestepping the limits by employing money raised through EIS or VCT in companies or businesses that are imported after the investment has been received. See VCM55132 for more details on the lifetime limit.

The relevant investments that count towards the annual and lifetime investment limits were extended by F(2)A 2015 to include relevant investments received by, or employed in, subsidiaries of the company or businesses transferred to the investee company (see VCM55131 and VCM55132).

A company’s annual and lifetime investment limits will depend on that company’s circumstances; including whether they are a knowledge-intensive company (see VCM8161) and specified company (defined below). The annual and lifetime investment limits are set out on following pages.

See also VCM54180 as regards the restriction on the amounts to be invested in any company in a twelve-month period included in the VCT approval conditions. If the VCT approvals condition at ITAS274(2) and S280B is breached in circumstances which do not result in the VCT having its approval withdrawn, S292A applies to treat the whole holding as non-qualifying, not just the amount of the holding by which the limit is exceeded.

Relevant Investments

‘Relevant investments’ include:

• an investment of any kind made by a VCT,

• an issue of shares in respect of which the company provides an EIS Compliance statement EIS1 (to access the form seeVCM14020)

• an issue of shares in respect of which the company provides an SEIS compliance statement SEIS1 (to access SEIS1 form see GOV.UK, HMRC’s website Guidance: Use the Seed Enterprise Investment Scheme (SEIS) to raise money for your company)

• an investment made in a social enterprise (shares or loan) in respect of which the social enterprise provides a SITR compliance statement

• any other investment which is a State aid approved by the European Commission in accordance with the Community Guidelines on Risk Finance Investments in Small and Medium-sized Enterprises (as replaced or amended). Companies will need to check with the issued or investment authority as to whether an investment is a notified State aid.

Any EU de minimis State aid is received, excepting an SEIS or SITR investment is not a relevant investment. De minimis aid is not notified and therefore cannot be approved under the Guidelines on State aid to promote risk finance investment.

Companies that have received another form of EU State aid, whether de minimis or other aid, should check with the issuer or investment authority to ensure that the receipt of investment under the SEIS, EIS, SITR or VCT schemes does not have cumulation consequences in respect of the other aid received. Aid may be withdrawn where the cumulation thresholds are exceeded.

Specified company

ITA07/S331C
A specified company has its registered office in Northern Ireland, and is carrying on a trade in:

• goods - this will usually involve the manufacture of goods and will not be part of the service sector; or

• the wholesale electricity market, including generation, transmission, and distribution of electricity.

(Note, exclusions on energy generation and fuel creation (VCM3160) still apply to specified companies.)