Is there any relief out there?

Is there any relief out there?

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A company wishes to use some of it's spare capital to invest in shares in another company. Is there any tax relief available to the company on it's investment?

The shares are likely to be worth, in the long term, values far in excess of the price that is paid for them.

It could be a fantastic investment but are there any incentives for a company to invest in another?
Iain Lindsey

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By AnonymousUser
20th Jan 2004 17:37

Yes, Corporate Venturing Scheme

See Sch 15 FA 2000 for full details. It's intended to be very similar to EIS for individuals.

Substantial Shareholding Exemption may also be relevant in due course - see Sch 7AC TCGA 1992.

But, give careful consideration to the potential effect on the CGT taper relief status of the shares in the investing company. Taper relief could be a good reason for investing personally rather than through the medium of a company (as could EIS), but I understand that you then have the problem of first extracting the surplus funds.

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