Tax Efficient Review editor Martin Churchill has slammed the Office of Tax Simplification’s plans to align time limits and conditions for venture capital trusts and the enterprise investment scheme as “dangerous nonsense”.
In its final report on tax simplification, published last week, the OTS suggests that the conditions to be met for investors and the investee company should be rewritten in a simpler form to make it easier for taxpayers to determine eligibility.
The OTS also suggests that the Government considers aligning the time limits and conditions for EIS and VCTs. Minimum investment for a VCT is five years and three years for an EIS.
But Churchill says investors do not need admin simplification. He says: “To say they should be aligned is dangerous nonsense. If all they try and do is simplify the admin, they will be dragging along untold changes for IHT, CGT and income tax situations.”
He says: “The EIS may lose its inheritance tax benefit, such as property relief. Who cares if it is simple, the Government needs to make sure that it is effective.”
The OTS report higlights business suggestions that the EIS £2m annual limit should be raised or removed as well as looking at whether the two-year window for using funds should be extended and if the 50-employee limit should be reviewed.