FORESIGHT 4 VCT PLC - Foresight Group

qualifying subsidiary at the time of the issue of shares or securities to the VCT (and at all times
thereafter).
The company must have a permanent establishment in the UK, but the company need not be UK
resident. A company intending to carry on a qualifying trade must begin to trade within two years of the
issue of shares or securities to the VCT and continue it thereafter.
A Qualifying Company may have no subsidiaries other than qualifying subsidiaries which must, in most
cases, be at least 51% owned.
4. Consultation and 2011 Autumn Statement
The Government issued a consultation document in July 2011 with proposals to simplify the venture
capital schemes (Enterprise Investment Scheme and Venture Capital Trust Scheme) and to improve
their focus. The proposals are intended to ensure that the venture capital schemes remain effective and
appropriately targeted to incentivise investment into companies that are essential for growth in the UK. In
the 2011 Autumn Statement the Government also said they will tighten the focus of the schemes by
introducing a new test to exclude companies set up for the purpose of accessing relief, exclude
acquisition of shares in another company and exclude investment in feed-in-tariffs businesses. In
addition to these changes that were consulted on, the Government have confirmed they will remove the
£1 million investment limit per company for VCTs to reduce the administrative burdens of the scheme.
5. Approval as a VCT
A VCT must be approved at all times by HMRC. Approval has effect from the time specified in the
approval.
A VCT cannot be approved unless the tests detailed above are met throughout the most recent complete
accounting period of the VCT and HMRC is satisfied that they will be met in relation to the accounting
period of the VCT which is current when the application is made. However, where a VCT raises further
funds, VCTs are given grace periods to invest those funds before such further funds become subject to
the tests.
However, to aid the launch of a VCT, HMRC may give provisional approval if satisfied that conditions (b),
(c), (f) and (g) in paragraph 1 above will be met throughout the current or subsequent accounting period
and condition (d) in paragraph 1 above will be met in relation to an accounting period commencing no
later than three years after the date of provisional approval.
The Company has obtained approval as a VCT from HMRC.
6. Withdrawal of approval
Approval of a VCT (full or provisional) may be withdrawn by HMRC if the various tests set out above are
not satisfied. The exemption from corporation tax on capital gains will not apply to any gain realised after
the point at which VCT status is lost.
Withdrawal of approval generally has effect from the time when notice is given to the VCT but, in relation
to capital gains of the VCT only, can be backdated to not earlier than the first day of the accounting
period commencing immediately after the last accounting period of the VCT in which all of the tests were
satisfied.
Withdrawal of provisional approval has effect as if provisional approval had never been given (including
the requirement to pay corporation tax on prior gains).
The above is only a summary of the conditions to be satisfied for a company to be treated as a
VCT.
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