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Further alterations to the rules on the plans, which invest in small, private up-and-coming companies


The Chancellor announced that the Government is to further alter the rules aroundVenture CapitalTrusts (VCT) and Enterprise Investment Schemes (EIS).


Mr Osborne said he was making the changes on the plans, which invest in small, private up-and- coming companies, to ‘ensure they are compliant with the latest state aid rules and increasing support to high-growth companies’.

Subject to state aid approval, the Government will require that all investments are made with the intention to grow and develop a business, and that all investors are ‘independent’ from the company at the time of the first share issue.

In addition, future EIS or VCT cash injections will be limited to firms less than 12 years old, other than where the investment will lead to ‘a significant change in a firm’s activity’.

Mr Osborne said: ‘Based on past tweaks, it is reasonable to assume that these changes are only likely to impact the future investments VCTs make rather than existing holdings, and therefore matureVCTs with existing well-diversified portfolios remain attractive.’

In addition, the Government is to introduce a cap of £15m on total investment received for venture capital schemes, increasing to £20m for ‘knowledge-intensive companies’, such as firms dealing in intellectual property. It is also proposing to up the staff limit for such firms to 499, from the current cap of 249.

The Government will also smooth the interactions between the schemes by removing the requirement that 70% of the funds raised under Seed Enterprise Investment Schemes must have been spent before EIS or VCT funding can be raised.

Information is based on our current understanding of taxation legislation and regulations.Any levels and bases of, and reliefs from, taxation are subject to change.Tax treatment is based on individual circumstances and may be subject to change in the future.Although endeavours have been made to provide accurate and timely information, Goldmine Media cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation.We cannot accept responsibility for any loss as a result of acts or omissions

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Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.Tax treatment is based on individual circumstances and may be subject to change in the future. Although endeavours have been made to provide accurate and timely information, Lloyd & Co cannot guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough review of their particular situation.We cannot accept responsibility for any loss as a result of acts or omissions.