Money News
In a move aimed at boosting small businesses Alistair Darling announced that the tax relief threshold for investments in the EIS (Enterprise Investment Scheme) is to be raised from £400,000 to £500,000. The EIS is a government scheme providing a range of tax reliefs for investors who subscribe for qualifying shares in qualifying companies.
For example, provided an EIS qualifying investment is held for no less than three years from the date of issue, or three years from commencement of trade, if later, an individual with no more than a 30% interest in the company can reduce their income tax liability by an amount equal to 20% of the amount invested. The minimum investment in an EIS is £500.
Under what are certainly complex rules CGT deferral relief is also available, as well as loss relief.
Meanwhile, the Chancellor announced a tweaking of the Enterprise Management Incentive scheme - better known as EMI.
EMIs are tax advantaged share options and are designed to help small, higher risk companies recruit and retain employees who have the skills to help them grow and succeed.
They are also a way of rewarding employees for taking a risk by investing their time and skills to help small companies achieve their potential.
Under EMI tax advantaged share options with a market value of up to £100,000 may be granted to a qualifying employee of a qualifying company, subject to a total share value of £3 million under EMI options to all employees. The share options limit is now being raised to £120,000.
However, due to EU State Aid guidelines companies involved in shipbuilding and coal and steel production will no longer qualify for EMI. In addition, EMIs will now be limited to companies with fewer than 250 employees.
12 March 2008 © Moneyextra.com
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