The regulations significantly increase the amount of information VCTs must file with HMRC.
The Venture Capital Trust (Amendment) Regulations 2016 amend the Venture Capital Trust (VCT) Regulations with effect from 29 December 2016. The amendments have effect for periods that end on or after 31 December 2016 and significantly increase the amount of information that is required to be contained in the annual regulation 22 return that VCTs must file with HMRC.
The annual return will require the following additional information:
If, on the last day of the period in question, a qualifying holding of a VCT is only capable of being treated as a qualifying holding because it had been acquired through the use of monies raised during the period 6 April 1995 to 5 April 2008 (or monies derived from investments that were made using funds raised within that period), additional information will be required under a new regulation 22A of the VCT Regulations.
Similarly, if on the last day of the period, a VCT holds money that is derived from the investment of funds that it raised between 6 April 1995 and 5 April 2008 and the VCT maintains information for the purpose of enabling it to make future investments that would not otherwise be capable of constituting qualifying holdings, the VCT must also provide additional information.
We envisage that it could prove challenging for some VCTs and their managers to provide the additional information that is now required. Therefore, we recommend that early consideration is given to how this information will be sourced.
The VCT Regulations are also amended so that the period that VCTs must keep records for is increased from six years to ten years from the end of the period in question.
It is still anticipated that the annual regulation 22 return will be required to be submitted in electronic format in due course. However, this has not been mandated yet.
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