Philip Hammond eyes new patient capital EIS funds


This plan could expand the ways investors apply tax relief.

Wealthy investors could offset tax bills against investments in some of the UK’s riskiest early-stage companies in the future, following the launch of a consultation at the Spring Statement this week amid soaring popularity for tax-efficient investments.

In his speech, Philip Hammond, the chancellor, mooted a new kind of higher-risk Enterprise Investment Scheme (EIS) fund that could allow investors to write off chunks of a capital gains tax (CGT) bill or even offset old income tax liabilities, as long as they invested in the highest-risk startups, known as knowledge-intensive companies.

Investors could also receive dividends from EIS companies free of tax after holding them for a certain period. Investors seeking tax-efficient ways to shelter their investments have also been turning to venture capital trusts (VCTs) in record numbers this tax year.

The funds are also increasingly being targeted by the government as a way of funneling long-term capital towards nascent UK businesses in an attempt to rival the entrepreneurial culture in countries such as the US. Click here to read full article.

Source: Financial Times