Venture capital schemes
There have been several recent changes to investments qualifying under Enterprise Investment Schemes (EIS), Corporate Venture Schemes (CVS) and Venture Capital Trusts (VCTs). A number of our clients are involved in raising finance under these schemes.
The 2007 Finance Bill has imposed additional qualification limits. The main changes are (although not confined to ) :
- An "employee test" has been introduced – a group raising money under EIS or VCT must have fewer than 50 full-time employees at the date on which the shares are issued.
- No more than £2 million can be raised in any scheme in the 12 months ending with the date of the investment. This is the first limit on the amount of funds raised, previously there was only a restriction on the level of gross assets before and after investment.
It seems unusual that the government is targeting the ‘venture capital’ end of the market, whilst the recently criticised private equity funds got off lightly in the budget!
