Draft Finance Bill 2012: Commercial investment relief has failed to be commercial!

  • Share

In June the Government proposed a new investment relief which they describe as designed to “encourage business investment” in the UK.  The relief is designed to allow non-UK domiciled individuals to make investments into UK businesses without triggering a tax charge and on the face of it would be very welcome.

The good news is that draft legislation was published today, to become effective 6 April 2012.  The bad news is that, unfortunately, as is often the case, the devil is in the detail and the number of conditions applying to the investment both before and after it has been made means that in many cases the relief is likely to make it unworkable. 

In our view the government has missed the opportunity to realise its mantra of creating one of the most competitive tax regimes in the UK. It remains more attractive for a non-UK Dom to invest in businesses in Europe or the United States, rather than the UK.  However the legislation is still subject to consultation and there is still time to correct this before it is introduced in April.

Back to the top