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EIS, VCTs and the Windsor Framework

The UK will still require the consent of the EU to enhance the EIS and VCT regimes or to extend their duration beyond April 2025, writes Andrew Harper (2 New Street Chambers). 

Ever since the UK and the EU agreed the terms of the Northern Ireland Protocol in October 2019 (the Protocol) the enterprise investment scheme (EIS) and venture capital trust (VCT) equity finance tax reliefs for investors in qualifying start-up businesses have been hostages of political pragmatism effectively incapable of legislative amendment. The moratorium is not just in respect of the schemes’ substantive provisions but also the existential issue of the rapidly approaching sunset of both reliefs on 5 April 2025. This predicament arises because for the purposes of the EU single market the tax reliefs accorded to scheme investors constitutes state aid to the companies in which they invest. Whilst the EIS and VCT schemes apply...

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