Key tax updates post-Budget - Income tax planning
The Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) both remain useful tax planning tools for high net worth individuals to maximise tax efficiencies. In certain cases, these tax breaks can provide significant tax savings to clients and are often used as part of a wider tax mitigation strategy.
These reliefs have been made even more attractive by the changes which will come into effect on 6 April next year, when the annual allowance for those investing in knowledge-intensive companies will be increased from £1million to £2million and the amount of tax-advantaged investments an eligible company can receive increased to £10million a year, providing greater opportunity for investors.
Following the Patient Capital Review, there were concerns that the EIS and VCT schemes would face major restrictions, however, the changes that were announced are mostly positive and should help these innovative companies grow.