Budget 2015: EIS and VCT Rules Changed

VCTs and EIS will no longer be able to invest in a company that is more than 12 years old, except where the investment will lead to a substantial change in the company's activity, or where where the total investment represents more than 50 per cent of turnover averaged over the preceding five years.

There will also be a cap on total investment that a company can receive from VCTs and EIS of £15m, increasing to £20m for knowledge-intensive companies. Again this is not expected to affect many prospective investments as there is already a rule which prevents VCTs and EIS investing in companies with gross assets of more than £15m.

The government also plans to increase the employee limit for knowledge-intensive companies to 499 employees, from the current limit of 249 employees. The legislation will not be retrospective, so it will not affect existing investments in VCTs and EIS. It will be implemented from the date of Royal Assent, expected Summer 2015.

Please note, this article is for information only and does not constitute investment advice. Past performance is not necessarily an indication of future returns; the value of investments and any income from them is not guaranteed and can fall as well as rise; pension rules and tax legislation are subject to change; we do not give tax advice. If you would like investment or pension advice on your individual circumstances, please do not hesitate to get in touch on 01392 875500 or info@SeabrookClark.co.uk

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