UK Venture Capital Tax Relief Schemes After Brexit

British Tax Review [2016] issue 5 pages 529-537

13 Pages Posted: 16 Sep 2019

Date Written: October 31, 2016

Abstract

Originally published as Finance Act commentary in the British Tax Review this paper begins by briefly examining four technical changes to the UK EIS, SEIS and VCT venture capital tax reliefs made by the UK Finance Act 2016. Detailed consideration is then given to the implications that the UK leaving the European Union might have for the future parameters of these tax reliefs. Written on 31st October 2016 the analysis primarily anticipates that either the UK will sever its ties to the EU without an exit deal of any sort being concluded, or that the UK’s departure from the EU will be facilitated by way of an EU/Canada style trade treaty incorporating the WTO 1994 Uruguay Round Subsidies and Countervailing Measures Agreement. The impact of the EU State aid rules manifested in the Risk Capital Guidelines and the General Block Exemption Regulation are compared and contrasted with those of the WTO SCM agreement. The discussion centres particularly on the constitution of a WTO subsidy in terms of benefit flow-through and the respective concepts of EU selectivity and WTO specificity, concluding that there are a number of significant ambiguities concerning the potential WTO treatment.

Keywords: venture capital tax relief, benefit flow-through, WTO subsidy, selectivity, WTO specificity, state aid

JEL Classification: H25, K34

Suggested Citation

Harper, Andrew, UK Venture Capital Tax Relief Schemes After Brexit (October 31, 2016). British Tax Review [2016] issue 5 pages 529-537, Available at SSRN: https://ssrn.com/abstract=3453211 or http://dx.doi.org/10.2139/ssrn.3453211

Andrew Harper (Contact Author)

New Street Chambers ( email )

2 New Street
Leicester, LE1 5NA
United Kingdom

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