Additional Notes

Expected Tax Changes

• The main rate of corporation tax is currently 28% and will become 27% from 1/4/11 and further reductions mean it will reduce to 24% by 1/4/14.
• The main rate of corporation tax for companies’ ring fence profits remains at 30%.
• Small Companies’ Rate
• The small companies’ corporation tax rate is currently 21% and will become 20% from 1 April 2011. The small companies’ rate for ring fence profits will remain at 19% from 1 April 2011 and the marginal small companies’ relief fraction will be 7/400.

Additional notes re VCTs post budget 22/06/10

• EIS – Potential changes to legislation may mean that it will no longer be possible to both defer gain under EIS rules & claim Entrepreneurs’ Relief.  (Date of change not yet known).
• VCT (date of change not yet known)
  - VCT ordinary share capital can be listed on any EU regulated market (previously only UK).
  - VCTs qualifying holdings must be at least 70% ‘eligible shares’ (previously 30%) & change in definition of ‘eligible shares’ to include shares which may carry certain preferred rights
• VCT & EIS (date of change not yet known)
  - Company issuing shares now only needs a permanent establishment in UK.  Previously trade must have been carried on wholly or mainly in the UK.