The changes to the rules guiding tax-advantaged investing announced in the summer Budget combined with recent government moves to bring to an end tax relief for renewables will see the sector turn to earlier-stage companies, according to VCT and EIS managers.
The new rules announced last year by Chancellor George Osborne came at the behest of the European Union, which determined the UK's previous rules governing tax reliefs breached state aid guidelines. They mean companies that receive tax-efficient investment must in most cases be less than seven years old, can receive no more than £12m from tax-advantaged sources in their lifetime, and funds can no longer back management buyouts (MBOs) and some other asset-backed deals. Alongside the final ending of the energy investment opportunity announced in the March Budget, it means funds and ...
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