Budget 2009 – Venture Capital Schemes
A number of the rules relevant to tax favoured Venture Capital schemes have been relaxed.
Companies raising funds for enterprise investment scheme (EIS), venture capital trusts (VCT) and corporate venturing schemes (CVS) will benefit from extended time limits to employ the monies invested. The new rules have a single requirement that monies raised must be spent within two years of receipt. In situations where a qualifying activity has not yet commenced, monies must be invested within two years of the commencement of the qualifying activity.
For taxpayers, the amount of EIS income tax relief that can be carried back to the previous tax year is extended to the full amount of the investment. Previously, there were a number of restrictions as well as an overall limit of £50,000. These restrictions have now been removed and relief is available for investments up to the overall annual investment limit of £500,000.
Two other minor improvements were also announced to remove an anomaly in connection with share for share exchanges and for companies who raise EIS and non-EIS monies on the same day.