Venture capital relief fails to meet expectations
VCT changes accused of giving with one hand and taking with the other
In a surprise move, Gordon Brown cut back tax relief on venture capital
trusts by only 10%, despite expectations of a 20% reduction.
Stuart Davies from Deloitte’s private client team said that when the 40%
relief was introduced in 2004, Brown indicated that it would be halved in two
years’ time.
‘The chancellor only reduced VCT relief to 30%, so he made it look like he
was giving something away when in fact he was taking it back,’ said Davies.
Experts were more critical of the changes made to the rules for enterprise
investment schemes, claiming that reduction to the size of the businesses
eligible for investment is a negative move.