Thompson Taraz has welcomed the Chancellor’s Budget announcement regarding the change in the regulatory status of SITR Funds. This is particularly gratifying as Thompson Taraz was involved in shaping this in conjunction with one of our clients who then lobbied the Cabinet Office. Once the regulatory change is introduced, SITR funds will be able to be promoted on the same basis as EIS funds

Speaking at the VCT and EIS Investor Forum on Tuesday 26th November, Lord Flight, Chair of the EIS Association (EISA) for the past eight years, has highlighted the need to improve the attractiveness of approved EIS funds – something he referred to as the "Cinderella" of the EIS world. Currently, HMRC approved EIS funds must invest 90% of monies raised across a minimum of four companies within 12 months of the investment opportunity closing in order for investors to benefit from the associated tax advantages. In addition, all investments have to be pro-rated across all investors. The advantage of an HMRC approved fund is that tax relief is given to the investor on investing into the fund but the consequences of missing one, or all of these conditions (and thus succumbing to 'clawback' and/or deferral of relief) means that few approved funds have ever been launched. The market is made up, therefore, largely of unapproved EIS funds. It will be interesting to see how HMRC, and the industry at large, responds to Lord Flight's call.