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Glasgow
+44 (0)141 221 2984

Edinburgh
+44 (0)131 225 6366

Stirling
+44 (0)1786 451745

Dumbarton
+44 (0)1389 765238

Hamilton
+44 (0)1698 459444

French Duncan

ENHANCING VENTURE CAPITAL INVESTMENTS

29 April 2014

Venture Capital Trusts (VCTs), Enterprise Investment Schemes (EISs) and Seed Enterprise Investment Schemes (SEISs) all received attention from the Chancellor in the Budget. There were several changes:

  • As previously announced, the Chancellor shut down enhanced buy-backs schemes operated by many venture capital trusts (VCTs). These schemes had allowed investors who had held their VCT shares beyond the tax relief claw back period (currently five years) to sell and immediately repurchase their holding with minimal expenses, but with the benefit of a new round of 30% tax relief. Not quite what the Treasury intended…

 

  • Companies claiming Renewable Obligations Certificates (ROCs) or Renewable Heat Incentive (RHI) subsidies from the government will be added to the long list of excluded businesses for VCTs, EISs and SEISs. Companies claiming feed-in tariff were excluded in the 2011 Budget. 
  • The SEIS will be made permanent – it originally was due to end in 2017. The capital gains tax reinvestment relief – worth up to 14% of the investment – will also continue.

 

  • For VCTs, it will be possible to subscribe for shares via a nominee. This will enable purchase to be made directly via investment platforms.

The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice. The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

 

If you have any questions regarding this article, please contact us on 0141 221 2984 or email.