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HMRC pulls approval for star Oxford Tech VCT on rule breach

HMRC pulls approval for star Oxford Tech VCT on rule breach

Her Majesty’s Revenue and Customs (HMRC) has withdrawn venture capital trust (VCT) approval for Oxford Technology.

VCTs are not permitted to invest more than 15% of their assets in any one company, but Oxford Technology crept over this threshold in Scancell.

Oxford Technology originally invested £125,000 in the oncology specialist in 1999, which it has continued to top up through Scancell’s floatation on AIM.

This included an option to buy shares through a discounted rights issue in August last year, which took Oxford Technology’s investment to £491,000.

This was less than 10% of the total capital raised by Oxford Technology, but a rise in Scancell’s share price tipped the holding over the 15% limit.

Oxford Technology notified HMRC of this in October 2013, as a result of which HMRC withdraw the VCT approval this month.

This means investors in Oxford Technology could now be liable for tax on both their capital and income gains from the fund.

Oxford Technology intends to appeal against the decision.

In a statement to the stock exchange, Oxford Technology said: ‘In the event that the appeal is not successful the directors of the company will need carefully to review the company’s options and consider its future as a listed company, which may lead to a cancellation of admission to the premium segment of the official list of the United Kingdom Listing Authority and to trading on the main market for listed securities of the London Stock Exchange.’

Over the past three years Oxford Technology has returned 249% on a share price basis, compared with 73% from the FTSE SmallCap excluding Investment Trusts index.

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