Private Equity Budget 2011 Notes

    View Authors March 2011

    BUDGET NOTES - PRIVATE EQUITY

    Please see the note which overviews measures set out in the Chancellor’s 23 March Budget which are particularly relevant for private equity.

    The good

    • The entrepreneurs’ relief lifetime allowance is to be expanded from £5m to £10m. In cash terms this is worth another £900k. Therefore entrepreneurs’ relief planning for both managers and co-investors will come into even sharper focus on private equity deals.
    • The cuts in the UK’s CT rate will be accelerated. The CT rate is to be cut to from 28% to 26% for 2011/12 declining to 23% for 2014/15.
    • EIS relief will be extended to plug the equity gap. The rate of EIS relief will be raised from 20% to 30% for the 2011/12 and, subject to obtaining EU state aid approval, the maximum investment in a tax year will be increased from £500k to £1m from 2012/13.