EIS / VCT Schemes
Currently HMRC accept that a company whose main business is the receipt of FIT payments is a "qualifying company" for the purposes of these reliefs. However, it has been announced that legislation will be introduced in the Finance Bill 2012 to state that companies whose trade consists wholly or mainly in the receipt of FIT payments (or similar subsidiaries) will only be eligible for these schemes if the commercial electricity generation has begun before 6 April 2012. Shares issued pre 23 March 2011 will not be affected by these changes.
Where new investors wish to claim EIS / VCT relief on their share subscriptions into solar companies those companies must have started generating electricity pre-6 April 2012. It is not yet clear whether a company which starts generating electricity pre-6 April 2012 will be affected if it starts generating electricity on new sites post 6 April 2012.
HMRC has now confirmed that renewable obligations certifications ("ROCs") will not be caught by this amendment1.
For further information or advice, please contact:
Michelle Thomas
Partner
Tel: 0845 498 7553
michellethomas@eversheds.com
Deneze Hastings
Partner
Tel: 0845 497 8223
denezehastings@eversheds.com
Footnote
1 Enterprise Investment Scheme (EIS) Venture Capital Trust (VCT) - Reforms, Budget 23 March 2011, Announcements and Questions and Answers
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
