UK lobby group presses for VC tax breaks

The Institute of Directors is urging the UK government to provide venture capital trusts an exemption from inheritance tax.

UK business lobby group, the Institute of Directors (IoD), is calling for investments in venture capital trusts to be given greater tax breaks.

In a speech to shareholders of Albion Ventures, the IoD’s director general Simon Walker, urged the UK government to extend to venture capital trusts the exemption from inheritance tax that Enterprise Investment Schemes (EIS) and Seed Enterprise Investment Schemes (SEIS) enjoy.

In the UK, inherited estates – property and possessions – must pay a 40 percent tax on any amount valued at £325,000 ($509,000; €407,000) and above. However, EIS and SEIS schemes, which are designed to encourage investment in small- and medium-sized businesses are not subject to the inheritance tax.

Walker argued that venture capital investors should also be permitted to take advantage of the tax break because it supports the “vibrant small-scale enterprises on which our economic future depends.”

Back in February, the UK’s venture capital trade body, the British Private Equity and Venture Capital Association (BVCA), also called for greater tax relief for venture capital trusts. In its 2014 Budget submission, the BVCA asked the government to introduce a 30 percent tax relief for institutional investors that invest in UK venture trusts.