Autumn Statement: Tax updates and technical changes
Tax-advantaged venture capital schemes
UKBAA particularly notes section 2.8 on tax-advantaged venture capital schemes, copied below for ease of reference:
“In Finance Bill 2017 the government will amend the requirements for the tax advantaged venture capital schemes – the Enterprise Investment Scheme (EIS), the Seed Enterprise Investment Scheme (SEIS) and Venture Capital Trusts (VCTs) – to:
- clarify the EIS and SEIS rules for share conversion rights, for shares issued on or after 5 December
- provide additional flexibility for follow-on investments made by VCTs in companies with certain group structures to align with EIS provisions, for investments made on or after 6 April 2017
- introduce a power to enable VCT regulations to be made in relation to certain shares for share exchanges to provide greater certainty to VCTs
- a consultation will be carried out into options to streamline and prioritise the advance assurance service.
The government will not be introducing flexibility for replacement capital within the tax-advantaged venture capital schemes at this time, and will review this over the longer term.”
Social investment tax relief
UKBAA members should also note that the government has announced the Finance Bill will make changes to the Social investment Tax Relief (SITR): the amount of investment social enterprises aged up to seven years old can raise through SITR will increase to £1.5 million. Certain activities, including asset leasing and on lending, will be excluded to ensure the scheme is well targeted. Investment in social care will be excluded initially, however the government intends to introduce an accreditation system to allow investment in social care to qualify for SITR in the future. Draft clauses will be published in the new year.