EIS and Brexit

Brexit is almost here! The UK is scheduled to leave the EU and move to a transition period on 29 March 2019.

This is 2 years to the day from the time the Prime Minister triggered Article 50, officially starting the process for the UK to leave the EU. The UK is then expected to enter a 21-month transition period until 31 December 2020 giving both parties time to adjust to the new relationship between the UK and the EU.

However, to date, the negotiations have been fraught both in Parliament and with the EU and it remains unclear exactly what final shape Brexit will take.

It should be noted that many of the tax reliefs offered by the government are subject to EU State Aid rules. Whenever the UK has tried to change the way the schemes work in the UK, they have needed prior approval from the EU.

The EIS, SEIS and VCT schemes are currently approved under the EU State Aid rules. That means the EU allows these schemes to help drive economic growth in the UK.

The Effects of Brexit

Brexit will undoubtedly affect the various investment schemes offered by the UK government.

However, we'll have to see if the schemes will change. We would expect the status quo to remain for the imminent future.

The government is likely to appreciate the opportunity to make their own unfettered decisions about the future direction of EIS. In fact, we could see a drive for more money to stimulate investment in the UK. This could result in the government making these schemes simpler and more appealing to a wider group of potential investors. Only time will tell what shape these changes will take.

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