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Vol 23 No 6 June/July 2018

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Cover of Drafting Commercial Agreements

Drafting Commercial Agreements

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Data protection handbook

Venture Capital Tax Reliefs: The VCT Scheme, the EIS and the CVS 3rd ed

ISBN13: 9781526502452
Previous Edition ISBN: 9781847660862
Published: June 2018
Publisher: Bloomsbury Professional
Country of Publication: UK
Format: Paperback
Price: £130.00

In stock.

Venture Capital Tax Reliefs, Third Edition provides an overview of the major investment schemes effecting capital tax reliefs including the Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS) and Venture Capital Trusts (VCTs).

It gives an overview of the schemes, outlines the investment reliefs available and how they work, as well as the qualifying conditions which must be met by investors.

As well as qualifying for the reliefs, it also guides the reader through the process of reducing or withdrawing from the reliefs, as well as advising how to defer reliefs or dispose of the investment.

There have been several major changes since the last edition in 2011, particularly due to changes imposed on the schemes by EU State aid regulations.

The third edition covers the introduction of the Seed Enterprise Investment Scheme (SEIS). Initially this was brought in as a temporary scheme in 2012 but was made permanent in 2014. SEIS is very popular particularly with new companies, which are often advised by the type of smaller accountancy firm that this book will appeal too. SEIS will be covered in detail as its absence is now a major omission - and the Corporate Venturing Scheme (CVS) needs to be removed as it ended in 2010.

Also includes the following changes:

In 2012, the size thresholds were relaxed. Employee test increased from “fewer than 50” to “fewer than 250”, gross assets increased from £8m to £16m and the annual investment limit increased from £2m to £5m.

2012 saw the introduction of a new “disqualifying arrangements” test. There were changes so that Venture Capital Trusts (VCTs) could invest more than £1m per company and EIS/VCT funds could no longer be used to acquire shares in another company.

In 2013, after being introduced, SEIS was extended and it was confirmed that the restrictions on loss relief would not apply to losses on SEIS and EIS shares. In 2014 SEIS was made permanent.

There were further restrictions on trades involving the subsidised generation of electricity and heat.

New legislation which came into effect in November 2015 following EU State aid changes fundamentally changed the way the schemes operate and includes:

  • A new age restriction for companies
  • A new lifetime limit of £12m State aid investment
  • A new growth and development requirement
  • A new 'Knowledge Intensive Company' concept
  • A new bar on the use of EIS etc money to acquire business.

Part 1 Overviews:
1. Introduction
2. The Enterprise Investment Scheme
3. The Seed Enterprise Investment Scheme
4. The Venture Capital Trust Scheme

Part 2 Qualifying Conditions:
5. Qualifying Companies
6. Qualifying Trades
7. Qualifying Investors

Part 3 Investment Reliefs:
8. EIS Investment Relief
9. SEIS Investment Relief
10. VCT Investment Relief

Part 4 Reduction or Withdrawal of Investment Reliefs:
11. Losing EIS Investment Relief
12. Losing SEIS Investment Relief
13. Losing VCT Investment Relief

Part 5 Deferral Reliefs:
14. Reinvestment in EIS Companies
15. Reinvestment in SEIS Companies
16. Reinvestment in VCT Companies

Part 6 Disposing of Investments:
17. Disposal of EIS Shares
18. Disposal of SEIS Shares
19. Disposal of VCT Shares

Part 7 How the Reliefs Work:
20. Giving and Withdrawing Investment Relief
21. Overlaps with Other Investment Reliefs
22. Giving and Withdrawing Capital Gains Reliefs
23. Overlaps with Other Capital Gains Reliefs

Part 8 Administration:
24. Claims, Approval and Clearances
25. Information Powers and Requirements

Part 9 Practical Matters:
26. Small Private Schemes
27. Public Offers
28. Exit Routes