Schedule 8
Finance Bill
6:15 pm
Angela Eagle (Parliamentary Secretary, HM Treasury; Wallasey, Labour)
The tax-based venture capital schemes—the enterprise investment scheme, venture capital trusts and the corporate venturing scheme—all contribute to the Government’s policy of improving the ability of small companies to secure longer-term support through equity investments. Such investments help small companies to grow and invest in their business, so that they are well placed to take advantage of business opportunities. Encouraging investment is even more important in the light of the economic challenges that we now face. Investment in the future is crucial if the UK is to emerge from the recession with a stronger, more prosperous economy.
At Budget 2008, the Chancellor lunched a public consultation on the enterprise investment scheme to investigate how the rules and processes that govern the scheme could be improved or simplified. As a result of representations made during that consultation, schedule 8 introduces four changes.
On the enterprise investment scheme, the schedule relaxes the time limits in relation to the employment of money invested; removes the link to other shares of the same class issued at the same time as qualifying shares; extends the period for carry-back of relief and allows the full amount subscribed for to be carried back, subject to the annual investment limit; and corrects an anomaly regarding the capital gains position of investors in the event of a share-for-share exchange. On the corporate venturing and venture capital trusts schemes, the schedule relaxes the time limits in relation to the employment of money by companies receiving investment. All four changes simplify the rules of the schemes and remove current restrictions. The Government amendments merely make minor changes.