Changes were announced in the 2011 Budget and have now received European state aid approval
In the Budget on 23 March 2011, HM Treasury increased the reliefs that apply to investments in Enterprise Investment Scheme (EIS) companies. That expansion was dependent on the European Commission giving approval for this perceived “state aid”. That approval has now been given and it is widely reported today (Reuters, Daily Telegraph) that the Treasury has accordingly confirmed that the changes announced in the Budget to the EIS will be going ahead:
- The 20% (of the cost of the shares) relief against the individual subscriber’s income tax liability for the tax year in which the investment is made is increased to 30%. This increase will be backdated to include subscriptions made after 6 April 2011.
- The £500,000 maximum relief that can be claimed for investment in EIS shares is increased to £1 million. This increase will come into effect on 6 April 2012.
HMRC publishes a useful overview of the EIS, which can be read here (contains the old reliefs).
The Government is consulting on proposals for a new stand-alone scheme, separate from EIS, to target seed investment by business angels – the Business Angel Seed Investment Scheme. We discuss that consultation, which closes on 28 September 2011, in this post.
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