23rd March 2011
Income tax relief for Enterprise Investment Schemes will increase from 20 to 30 per cent from April this year while the investment regime for both EISs and VCTs will be liberalised from next year.
However wind and solar companies which benefit from ‘feed-in' tariffs will be excluded from the EIS and VCT regime from next year. Such schemes were regarded as benefiting from a double tax break – the tariff and the tax shelter.
The Chancellor believes the changes will target the tax benefits towards genuine risk capital investments.
From April next year, the annual EIS investment limit for individuals will rise to £1m.
Both types of investment will be able to invest in companies with 250 employees and gross assets of £15m instead of the current £7m cap.
The annual investment limit per company for both will increase to £10m for both vehicles.