Budget 2010 – Venture Capital Schemes
Changes to the rules relating to Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) have been announced. This will put in place the final four changes the UK agreed to implement with the European Commission as a condition for their approval by the Commission as approved State aids.
- Removing the requirement that a VCT’s shares must be included in the official UK List and replacing it with one that their shares must be traded on an EU regulated market.
- Changing the rules governing the amount of a VCT’s investment that must be held as equity.
- Applying a new requirement that to qualify under either scheme, a company must not be in difficulty.
- Replacing the requirement that to qualify under either scheme a company must carry on its qualifying trade wholly or mainly in the UK, with one that the company must have a permanent establishment in the UK.
The changes will take effect on or after the date when the legislation receives Royal Assent with the exception of the definition of eligible shares for VCTs, which will not affect monies raised by the VCT before the relevant date.