The Autumn Statement included important technical changes to the rules around VCTs, EIS and Social Investment Tax Relief (SITR)

Leading Venture Capital Relief tax adviser Philip Hare & Associates has published a comprehensive summary of the changes. This document is available for authorised financial advisers to download here. Please note, neither Philip Hare & Associates nor Kin Capital is giving tax or financial advice in making this document available.

From Kin Capital’s point of view, there were many things in the Autumn Statement that struck us, not least…

  1. All the changes show the Government remains committed to supporting the Venture Capital schemes. They are sympathetic that advance assurance application delays with HMRC are creating problems for some. This can have a knock on effect on when investors receive their tax relief certificates. That said, all investors in tranche 1 of the Goldfinch SEIS Fund received 100% of their tax relief certificates earlier this month – within 8 months of investments being made.
  2. If anyone thought that the old guard of MBO VCTs weren’t dead; confirmation of the rules around ‘replacement capital’ means they now are. The likes of Pembroke VCT and the (very!) small handful of other VCTs that invest in genuine growing businesses are where the market is heading.
  3. Social Investment Tax Relief is moving into the mainstream. The increase in limits from approximately 300K per investee enterprise to £1.5m from 6th April 2017 is great news for investors in our Bright Futures SITR Fund. The changes mean we will be able to deploy more capital, more swiftly.
  4. The Government believes that Oxford & Cambridge Universities are hubs of world beating innovation, a view shared by Parkwalk Advisors, who back businesses coming out of these and other UK universities through their Parkwalk Opportunities EIS Fund, producing impressive returns in the process.
  5. The Government is keen to address the UK’s housing shortage and is pumping in £2.3Bn to improve infrastructure around greenfield housing development, just in time for our latest EIS Fund opening; the Property Planning EIS Fund (opening 5th December 2016!).