Hunt extends VCT and EIS sunset clause to 2035
- On November 23, 2023
- By GrowthInvest Marketing
Chancellor Jeremy Hunt has extended the VCT and EIS sunset clause to April 2035 in today’s Autumn Statement.
The sunset clause, which was created as part of European Union state aid rules, meant VCT relief is only available to subscribers for shares issued before April 6, 2025.
Hunt’s predecessor Kwasi Kwarteng had announced plans to extend the sunset clause in his “mini” Budget in late 2022 but today plans to do so were made concrete.
Nicholas Hyett, investment manager at Wealth Club, said: “The announcement that the government is extending the VCT and EIS sunset clauses out to 2035 is good news for two schemes that have supported billions of pounds worth of investment into UK start-ups.
“It removes uncertainty that has been lingering over the sector for some time, potentially putting off new entrants and new investors, and secures a crucial source of funding for the UK’s blossoming start-up scene.
“It is a shame that the sunset clause hasn’t been abolished altogether – which would have avoided a repeat of the current uncertainty in a decade’s time – but with the Labour Party also voicing support or the schemes the extension is welcome nonetheless.”
VCTs have surged in popularity recently, with more than £1bn invested last year, with experts predicting this will continue as the tax burden on wealthy people rises with a number of tax thresholds frozen until 2028, including inheritance tax and income tax.
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