VCM53080 - VCT: investor CG deferral relief: how was the relief given?

TCGA92/SCH5C/PARA2

»Ê¹ÚÌåÓýapp relief was given by deferring the date on which the chargeable gain was treated as accruing. »Ê¹ÚÌåÓýappre was no requirement that the proceeds of the disposal were actually invested in the subscription for the new shares. »Ê¹ÚÌåÓýapp gain was matched against the expenditure on a pound for pound basis. »Ê¹ÚÌåÓýapp relief had to be claimed.

Example

In the tax year 1996-97 an investor has the following transactions:

  • May 1996 disposes of a property incurring an agreed chargeable gain of £84,000.
  • September 1996 subscribes for and is issued £60,000 worth of shares in a VCT. »Ê¹ÚÌåÓýapp investor receives ‘front-endâ€� income tax relief on the investment.

»Ê¹ÚÌåÓýapp investor can make a claim for up to £60,000 of the £84,000 gain to be deferred.