Changes to the EIS and VCT Schemes

16-Dec-2011  |  Corporate, Financial Institutions & Services, Tax


Following a consultation process held during the summer (view our previous e-briefing regarding this consultation), draft legislation has now been published to implement the changes to the Enterprise Investment Scheme ("EIS") and Venture Capital Trust ("VCT") regime announced by the Government in its 2011 Budget.

You can view our e-briefing, which summarises the changes made under the draft legislation, here. However, highlights of the changes include:

  • Increasing the annual limit for qualifying investment under EIS from £500,000 to £1,000,000;
  • Aligning the tests for qualifying shares for the EIS and VCT regimes, so that certain classes of preference share will qualify for EIS relief;
  • Increasing the annual cap on aggregate funds that can be raised by a company under the venture capital schemes (i.e. EIS, VCT, the corporate venturing scheme and the new seed enterprise investment scheme, SEIS) from £2,000,000 to £10,000,000; and
  • Removal of the restriction on EIS relief for an investor holding more than a specified proportion of the loan capital in a company (so that an investor can, in effect, make or have made unlimited loans to the company without prejudicing their ability to claim EIS relief for equity investment).

Also included within the draft legislation are provisions dealing with the proposed new "Seed Enterprise Investment Scheme" (SEIS). View our e-briefing, which provides further details of the benefits and conditions of this scheme.

Lawyers Robert Young, Peter Jackson, James Meakin