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TCGA92/SCH5C/PARA1 (2)

To qualify for deferral relief the taxpayer must have received ‘front-endâ€� income tax relief on the subscription, see VCM51020 onwards. »Ê¹ÚÌåÓýapp maximum amount of deferral relief which could be claimed in any one tax year was the total amount subscribed up to £100,000 for shares issued in that one tax year. But a gain of more than £100,000 could be deferred by subscriptions for shares issued in different tax years.

An investor who was unable to obtain the full amount of ‘front-end� income tax relief available because his or her income tax liability was insufficient could still claim deferral relief on the full amount which would qualify for ‘front-end� income tax relief. For example, an investor subscribes £100,000 for 100,000 VCT shares which are issued in the same tax year as the subscription is made. Because his or her income tax liability was insufficient the investor’s ‘front-end� income tax relief is restricted to £12,000 but he or she could claim deferral relief up to the full subscription of £100,000 for shares issued in that tax year.

Deferral relief was not available if the investor’s income tax liability was nil before taking account of ‘front-end� income tax relief. In these circumstances no ‘front-end� income tax relief is actually given and as a result deferral relief is not available.