VCM58080 | VCT: VCT returns: identifying investments funded by different issues of shares: interaction of protected money and further issue

Interaction of ‘protected money’ and ‘further issues’ funds

This section applies for accounting periods including dates up to and including 5 April 2018.

An investment acquired with funds from a further issue will be disregarded for three years for the purposes of the 70% qualifying holdings condition and the 30% or 70% eligible shares condition. Since the investment will not enter the 70% qualifying holdings condition and the 30% or 70% eligible shares condition computations its status as protected money will not be directly relevant during this time.

If the further issue was made at a time when the funds were also protected money in relation to a relevant change, the investment will be treated as made out of protected money once the further share issue period has come to an end.

It is not possible for a VCT to treat an investment as purchased out of a particular share issue for the purpose of the protected money rules, but treat it as purchased out of a different share issue for the purpose of applying the further share issue rules.