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Finance Bill 2012 Draft Legislation

16 December 2011

Downing comments on the draft legislation published by the Government on VCT & EIS rule changes

On 6 December 2012, the Government published draft legislation on VCT & EIS rule changes which, following a consultation, is proposed to be included in the 2012 Finance Bill.

Downing welcomes the proposals, most of which are positive and will increase both the number and size of businesses in which our VCTs are permitted to invest. Downing's VCTs focus on investing in UK businesses that trade from freehold premises, such as health clubs, children's nurseries, pubs and schools. We are pleased to confirm these trades will continue to qualify. Therefore, the investment strategy for Downing's Planned Exit VCTs (and our Generalist VCTs) remains unchanged. Those VCT Managers that are affected by the rule changes may be forced to invest most of the funds they raise in 2011/12 by 5 April 2012, which is only a very small window compared to the three years permitted.

We have created a summary of the key proposals and our thoughts on each. To read, click here.