SVM109080 - ITEPA: Memorandum of Understanding

A Memorandum of Understanding (MOU) between the British Venture Capital Association (BVCA) on the income tax treatment of managersâ€� equity investments in venture capital and private equity backed companies was agreed between the Inland Revenue and the BVCA on 25 July 2003. »Ê¹ÚÌåÓýapp MOU sets out the approach accepted by HMRC and the BVCA in determining whether the price paid by ‘managersâ€� represent

  1. »Ê¹ÚÌåÓýapp initial unrestricted market value where the shares acquired are restricted securities
  2. »Ê¹ÚÌåÓýapp market value where the shares are not restricted.

»Ê¹ÚÌåÓýapp MOU is self - explanatory and the text can be found in the Employment Related Securities Manual (ERSM) at ERSM30520.

A separate MOU was agreed on 25 July 2003 in respect of the income tax treatment of venture capital and private equity limited partnerships and carried interest. »Ê¹ÚÌåÓýapp text of the MOU is at ERSM30530.

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Additional Guidance: SVM150000

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