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Budget viewpoint: Investment tax advantages

16 November 2017

All this week the technical experts at Utmost Wealth will be giving us their views of what we might see, or they would like to see, in the Autumn Budget on Wednesday 22 November. Here, Barry Foster, technical sales manager (pictured), believes the EIS and VCT regimes may see changes.

Further to the Treasury’s recent consultation “Financing growth in innovative firms” I suspect there will be some announcements regards changes to the EIS and possibly VCT regimes.

There may be restrictions on “…lower risk, often asset-based companies that generate stable returns without aiming for significant growth” and schemes considered to be “capital preservation” investments.

The aim of the generous tax advantages offered by the EIS, SEIS, VCT regimes is to encourage investors to take the risk of investing into truly innovative and entrepreneurial businesses which involve genuine investor risk.

The consultation implies the current regime is not meeting that objective and investors are being offered tax advantages without the commensurate risk.

Changing the rules to restrict the income tax and capital gains tax breaks of these regimes may be easier to achieve than restrictions on Business Property Relief.

 

 

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