Being the Homeland of about 4.8 million private sectors enterprises and businesses, the United Kingdom is one of the excellent places to do business in the world with 4.8 million private sector enterprises. As United Kingdom is the most popular location for foreign direct investment in Europe.

UK government provides great opportunities to small and midsize investors to grow in UK.

Temptation to invest in small companies and business in UK

Three different tax Temptation plans are available to encourage equity investment in small higher-risk trading companies, it encourage starting a business in UK.

Temptation Plans

  1. Enterprise investment scheme
  2. Venture capital trusts
  3. Corporate venturing scheme

ENTERPRISE INVESTMENT SCHEME to Start a Company in UK

The ENTERPRISE INVESTMENT SCHEME is available to individuals subject to United Kingdom income tax making direct equity investments into unquoted trading companies.  The support available contain relief from income tax equal to 20% of the investment in shares acquired on issue by a qualifying company, relief from capital gains tax on a disposal of shares which qualify for income tax relief, and deferral of a accuse to capital gains tax on the discarding of assets where the proceeds are re-invested in shares in a qualifying company.

VENTURE CAPITAL TRUSTS to start business in UK

A VENTURE CAPITAL TRUSTS is a special type of quoted investment vehicle which invests in a variety of non estimated companies with same qualifying criteria to those of an ENTERPRISE INVESTMENT SCHEME company.  Individuals subject to United Kingdom income tax investing in a VENTURE CAPITAL TRUSTS are entitled to income tax relief (at a rate of 30%) on amounts subscribed for new shares in the VENTURE CAPITAL TRUSTS, an exemption from income tax on dividends on that shares, & an exception from capital gains tax on the disposal of ordinary shares in the VENTURE CAPITAL TRUSTS.

Difference between VENTURE CAPITAL TRUSTS relief & ENTERPRISE INVESTMENT SCHEME relief 

VENTURE CAPITAL TRUSTS relief has an upper threshold of £200,000 per individual per annum whereas the threshold for ENTERPRISE INVESTMENT SCHEME relief is £500,000 per individual per annum.  The reliefs are lost or clawed back if the shares are disposed of within three years of acquisition in the case of the ENTERPRISE INVESTMENT SCHEME and within five years in the case of Venture capital trusts.

CORPORATE VENTURING SCHEME to business in London or UK wide

The CORPORATE VENTURING SCHEME is similar to ENTERPRISE INVESTMENT SCHEME save that it is directed at encouraging trading companies subject to United Kingdom corporation tax to invest in small, higher-risk trading companies.  The reliefs include relief against corporation tax for qualifying subscriptions equal to 20% of the amount subscribed (provided the shares are held for at least three years), relief (against income or gains) for losses incurred on the disposal of qualifying shares and a relief that postpones chargeable gains on qualifying shares on their re-investment into other qualifying shares.

Source by Muhammad Umair Khan

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