Budget 2011 – EIS and VCT investment reliefs
The Government have announced that the rate of income tax relief for individual investors in the Enterprise Investment Scheme (EIS) is to be increased from 20% to 30% from 6 April 2011, subject to state aid approval. The EIS is designed to help smaller higher-risk trading companies to raise finance by offering a range of tax reliefs to investors who purchase new shares in those companies.
Further legislation will also be introduced in Finance Bill 2012 to increase:
- The thresholds for the size of qualifying company for both EIS and Venture Capital Trusts (VCTs) to fewer than 250 employees and to the company having no more than £15million of gross assets before the investment.
- The annual amount that can be invested through both EIS and VCTs in an individual company to £10million.
- The annual amount that an individual can invest through EIS from £500,000 to £1million.
These changes which are subject to EU State Aid approval will apply from 6 April 2012.