VCs to be spared tax rises
The government is set to grant venture capitalists exemptions from plans to increase capital gains tax on share options.
Announced in the Budget, Gordon Brown said he planned to tighten the laws on taxing mainstream share options, meaning that venture capital profit sharing payouts could be taxed at 40% instead of at 10% as they have been since 1987.
However fears that venture capitalists would abandon the country and establish operations offshore lead to negotiations taking place with the industry. A deal is likely soon, the Financial Times reported today.
Representative body, the British Venture Capital Association, is said to be in ‘ongoing and constructive dialogue with the Inland Revenue’ with the aim of maintaining the status quo.