I wanted to update you on some changes announced in the budget regarding VCT and EIS and how these will impact particular products for tax year end planning.

• From April 2011 the income tax relief for EIS investments will be increased from 20% to 30%.  This is clearly a massive boost to the returns for EIS investors, this relief will apply to current or next tax year.
• From April 2012 the constraints on the size of VCT and EIS investments will be relaxed.  50 employees become 250.  £7m gross assets become £15m.  £2m max funding becomes £10m.  All of these things will open up the opportunities for certain providers. Some with multiple VCT co investing are particularly well placed.  It will also open up the AiM market for VCT/EIS again which was virtually shut down by the constraints.
• In addition the annual EIS investment limit for individuals will be increased to £1m (from £500k) from April 2012
• We were expecting some constraints on VCT/EIS investing in solar installations, and we got them.  Any new investments (from today) that are not connected to the grid by 5 April 2012 will not qualify. 
• This will not affect any current low risk VCT and EIS as they should be fully invested and the sites operational before August 2011.