Nov 012015
 

Entrepreneurs have been taking a bit of a battering this year, with three Budget measures being introduced to stop them from using the relief in a way in which it wasn’t intended by the likes of HMRC (announced during the first Budget of 2015 and at the previous Autumn Statement 2014). So it’s a welcome change to be able to write about some good news.

This is about a measure concerning the deferral of CGT, known as reinvestment relief. A person who has incurred a capital gain on another asset can defer his tax liability by subscribing for shares or securities under the various Enterprise Investment Schemes. For two of these schemes a gain that qualified for entrepreneurs’ relief couldn’t be deferred unless the investor gave up his claim to the 10% rate and paid the higher rates when the tax was eventually due.

This will no longer be the case – one can now defer the gain AND benefit from the 10% rate. In other words, you can have your cake and eat it.

But one needs to tread with caution, as the legislation contains a small trap…

(This article can be downloaded in pdf format at Academia.edu.)

Continue reading »

Jul 022015
 

In this article we take a look at the Venture Capital Schemes and ask whether the risks involved are really worth it. In particular we see there are two types of risk – investment risk and tax risk. Investment risk can lose you money, but losing the tax reliefs is not necessarily fatal.

This article was first published on linkedin. Continue reading »

Jun 022015
 

I’ve finally managed to update that table! It wasn’t easy getting it all on one page. Last time there were only three Venture Capital Schemes, now there are four, with the addition of the Social Enterprise Scheme. Soon we shall have a fifth in the form of the Social VCT. Continue reading »

Budget 2015 – Changes to the Venture Capital Schemes and EU State Aid

 Investment Tax, Venture Capital Schemes  Comments Off on Budget 2015 – Changes to the Venture Capital Schemes and EU State Aid
Apr 222015
 

UPDATE

This article was written shortly before the Summer Budget of 2015. Since then, some of the measures have been modified and are now enacted in F(No 2)A 2015, together with the introduction of a new blanket prohibition on using the funds raised to acquire shares in another company. For VCTs this puts a damper on the practice of raising money to finance management buy-outs.

One of the announcements made during Budget 2015 was a series of measures aimed at tweaking the Venture Capital Schemes so that they are in line with EU State Aid rules.

There are four Venture Capital Schemes, though the rule changes affect just two of them, the Enterprise Investment Scheme (“EIS”), and the Venture Capital Trust Scheme (“VCT”). The other two schemes are the Seed Enterprise Investment Scheme (“SEIS”) and the Social investment Tax Relief Scheme (“SITR”) introduced last year. Continue reading »

Jul 122013
 

Please note, this table and the commentary are out of date. A more up to date version which takes into account the new Social Enterprise Investment Scheme can be found here

There are three types of Venture Capital Scheme, each one with tax breaks to induce investors to part with their hard earned money. The following table is a summary of these tax breaks, together with the relevant statutory provision. Continue reading »