The Chancellor makes his Autumn Statement

The Chancellor made his Autumn Statement on 29 November. The main tax announcements include:

SEIS

To encourage investment in new start-up companies a new scheme will be introduced (Seed Enterprise Investment Scheme (SEIS)) from April 2012.  SEIS will provide income tax relief of 50 per cent for individuals who invest in shares in qualifying companies, with an annual investment limit for individuals of £100,000.  The Government will also offer a capital gains tax holiday for investments made into the new scheme. This will provide for a capital gains tax exemption on gains realised on disposal of an asset in 2012-13 and invested through SEIS in the same year.  The scheme will also be open to companies, but with a total investment limit of £150,000.

EIS

The Government will also simplify the Enterprise Investment Scheme (EIS) by relaxing the connected person rules and the definition of shares that qualify for relief. The Government will tighten the focus of the schemes by introducing a new test to exclude companies set up for the purpose of accessing relief, exclude acquisition of shares in another company and exclude investment in Feed-in-Tariffs businesses.

VCTs

The Government will remove the £1 million investment limit per company for venture capital trusts (VCTs) to reduce the administrative burdens of the scheme. Commentators have noted that this could transform the VCT sector.

Tax Rates

No changes to tax rates were announced.

The full statement can be found here.

Author: Clare Carpenter, Tax Associate