The 2007 Budget led to a decline in EIS and VCT
investments. But new incentives and benefits announced in the
2008 Budget look set to build an appetite for EIS.
After the seismic changes that altered the landscape for
Enterprise Investment Scheme (EIS) and Venture Capital Trust
(VCT) investments in 2007, the venture capital industry was
able to breathe a sigh of relief following the 2008 Budget. The
increase in the amount on which an EIS investor may claim
income tax relief, from £400,000 to £500,000 per
tax year as of 6 April 2008, is likely to boost their
appeal.
Unwelcome Restrictions
There were two main issues that arose for EIS in 2007.
Firstly, the 2007 Budget included a new investment limit into
an EIS/VCT qualifying company no more than £2m in a
12-month period. Combined with the reduction in the overall
gross assets test of a company from £15m/£16m to
£7m/£8m, the profile of
