020 7189 9999
Opening hours
Mon - Fri: 7.45am to 6pm (Thurs 8pm)
Sat: 9.30am - 1.30pm
Request a call back
  • Home
  • News
  • VCTs and EIS Budget 2015 update

VCTs and EIS: Budget 2015 update

There were no changes to the current tax reliefs available on Venture Capital Trusts and Enterprise Investment Schemes and the Government remains committed to these schemes.

However the Budget did include some technical changes to the rules governing which companies are eligible to receive investment from tax-advantage investment schemes to support smaller companies (Seed EIS, EIS and VCTs), in order to comply with European Union regulations on state-aid to businesses.

The key “tweaks” are that future investments will be restricted to companies less than 12-years old other than where an investment “will lead to a substantial change in a company’s activity”. Currently there are no restrictions on the age of a company that is eligible to receive VCT or EIS investment.

Additionally, a total cap of £15 million is being introduced on the amount of tax-advantaged funding a business can receive. This rises to £20 million for companies that meet certain conditions demonstrating they are ‘knowledge intensive’.

The Budget also confirmed its intention to launch a separate Social Venture Capital Trust allowance, to encourage investments into social-impact projects, with similar tax reliefs to VCTs in a future Finance Bill.

The VCT and EIS industry is used to successfully accommodating periodic changes to investment criteria and, as with previous changes, we do not believe these will impact existing investments held by VCTs, but relate to future investments they make. Therefore any shift towards earlier phase businesses by already well-diversified VCTs is likely to be gradual.

We expect demand for VCT investment to be supported as a result of the reduction in the pensions lifetime allowance, as higher-earning investors with a high tolerance to risk who have fully utilised their ISA and pension allowances look for alternative tax-efficient investments.

For more information on VCTs please click here

The value of your investment can go down as well as up, and you can get back less than you originally invested.

The Bestinvest Online Investment Service, including any account analysis and investment reports provided by our guidance services, is an online execution-only dealing service for investors who want to make their own investment decisions. It does not provide advice on the suitability of products and investments; if you are unsure about the suitability of any investment you should seek professional advice. Clients of our Investment Advisory Service and Managed Portfolio Service can use the website to obtain current valuations of their investments but cannot trade on these accounts online and should call their adviser if they wish to discuss changes to their investments.

Past performance or any yields quoted should not be considered reliable indicators of future returns. Restricted advice can be provided as part of other services offered by Bestinvest, upon request and on a fee basis. Before investing in funds please check the specific risk factors on the key features document or refer to our risk warning notice as some funds can be high risk or complex; they may also have risks relating to the geographical area, industry sector and/or underlying assets in which they invest. Prevailing tax rates and relief are dependent on your individual circumstances and are subject to change.

Issued by Bestinvest (Brokers) Limited (Reg. No. 2830297), which is authorised and regulated by the Financial Conduct Authority. Financial services are provided by Bestinvest (Brokers) Limited and other companies in the Tilney Bestinvest Group, further details of which are available here. This site is for UK investors only.
© Tilney Bestinvest Group Ltd 2016.

Version: RC1027.44113